May 21st, 2008 | Published in SL Business
By Sigimund Leominster, News Editor
In a recent report by Gartner, Inc., an information technology research and advisory company based in Stamford CT, analysts suggest that 90% of businesses who try to set up a presence in Second Life fail within 18 months. In a press release dated 15th May, 2008, Gartner VP Steve Prentice said, “Businesses have learned some hard lessons. They need to realize that virtual worlds mark the transition from web pages to web places and a successful virtual presence starts with people, not physics. Realistic graphics and physical behavior count for little unless the presence is valued by and engaging to a large audience.”
Fundamentally, the analysts at Gartner blame the failure rate on an over-focus on technology rather than a targeted endeavor to work out exactly what users need from the Second Life experience. Some corporations simply entered SL because competitors were there or because it seemed “cool.” It also appears that once there, businesses did little market research into how the SL environment worked.
Jumping into Second Life because it is “cool” is clearly not a marketing strategy. There needs to be purpose and a plan – just like in Real Life. The SL market is small and the demographics varied; the only generalization to make is that the population (a) uses computers and (b) are predominantly not teenagers.
Some companies do make capital from the intelligent use of the Second Life environment. As SLentrepreneur Magazine has already reported, GAX Technologies in Luxembourg are hosting their second Working-Worlds conference in SL on May 29th, where European employers can meet and hire prospective workers. Last year they had over 1000 visitors and 55 people ended up with real life jobs – not bad for a virtual conference!
In this situation, companies are marketing themselves via a third party, which lowers investment costs and limits their need to set up and maintain a Second Life site (they use GAX’s simulation). GAX also used in-world media to promote the event, via a Second Life PR firm, Wilder PR Inc., who in turn contacted the in-world media and arranged for advertising.
What this suggests is that it IS possible to market in Second Life but that the strategies need to be tweaked for that specific environment. Just like a US company might open up an office in a foreign country by working with a local partner, real life companies should consider working with Second Life partners.
Indeed, the Gartner report takes a more optimistic view of virtual worlds over the long term. By 2012, Gartner estimates that 70% of organizations will have their own private virtual worlds and goes on to predict that these internal worlds will have greater success due to lower expectations, clearer objectives, and better constraints. The recent partnership between Linden Lab ® and IBM ® is a good example of how this might work.
Prentice goes on to highlight how he feels businesses should respond to the challenge of Second Life and other virtual worlds. “Companies need to start thinking what their virtual world strategy is, incorporate it into their internet strategy, and merge their two-dimensional web pages to support a ‘3D web place.’ Virtual world presence is not meant to replace the ‘2D world’ but to supplement it.”