Experimenting with Brands in Second Life

In 1954, Frederick Pohl, a gifted social satirist and science fiction writer, published the short story, "The Tunnel Under the World", which should have been made into a first rate Twilight Zone episode. A man wakes up in bed next to his wife, gets up, and goes to work, and along the way, he starts to sense that there's something subtly different about his world:

He had been exposed to the captive-audience commercials so long that they hardly registered on the outer ear any more, but what was coming from the recorded program in the basement of the building caught his attention. It wasn't merely that the brands were most unfamiliar; it was a difference in pattern.

But no one else seems to have noticed that the entire adscape has changed overnight. And then it happens again, and again, and again. By the end of the story, he discovers that he is living inside a consumer research experiment:

They aren't Russians and they aren't Martians. These people are advertising men! Somehow -- heaven knows how they did it -- they've taken Tylerton over. They've got us, all of us, you and me and twenty or thirty thousand other people -- right under their thumbs. Maybe they hypnotize us and maybe it's something else; but however they do it, what happens is they let us live a day at a time. They pour advertising into us the whole damned day long. And at the end of the day they see what happened -- and then they wash the day out of our minds and start again the next day with different advertising....They test every last detail before they spend a nickle on advertising!

Pohl's short story about this microworld that allows Madison Avenue to run experiments on consumers anticipates the role that brands and advertising will play in new multiplayer game worlds such as Second Life. Second Life has been one of the hot new stories in participatory culture in recent months. Yochai Benkler's The Wealth of Networks uses SL as a primary example of the grassroots energies being unleashed in network society. Educators are increasingly experimented with the affordances of this space with Harvard's Berkman Center teaching a course in intellectual property law this term open to Harvard students and their avitars. Psychologists are using Second Life to conduct therapy -- especially for autistic patients for whom it can represent a gradual introduction into reading and communicating cues about emotional states during social interactions. There are experiments going on that are exploring new governance structures in political science, new forms of community in sociology, and new modes of transaction in economics. Activists are using the space to increase public awareness of their concerns. And sexual minorities are finding new outlets for erotic expression amid the hidden corners of this world.

We might think of Second Life as a platform for thought experiments -- a place where we can test ideas that might not be ready for prime time, where we can experiment with new ways of being on both a personal and communal level. If you can think it, you can build it on Second Life, and so far, if you build it, they will come. Some have called Second Life the digital counterpart of Burning Man -- a place where people come to see and be seen, to build and to see what others have built, and to celebrate their power to reimagine the terms with which they conduct their everyday lives.

One of the recent graduates of the Comparative Media Studies master's program, Ilya Vedrashko, has been exploring the relationship between games and advertising. The Russian-born Vedrashko is perhaps the most unapologetic capitalist to ever pass through our program. He has found his calling in exploring the ways new media technologies can give rise to alternative approaches to brands and advertising. He has started blog on the future of advertising and a second on advertising through games. He recently posted his thesis online. Vedrashko now works at the Boston-based agency, Hiill Holliday, analyzing trends in emerging media that impact the advertising world. It is perhaps inevitable that he would turn his attention to Second Life, where players are generating their own versions of familiar advertising icons and forming their own agencies while corporations are looking for ways of making their own presences known in this ecclectic and rapidly evolving environment.

The following text is taken directly from Vedrashko's thesis.

What Is Second Life

Second Life, whose membership has tripled in the past six months (January-July of 2006) to surpass 300,000 players, has recently landed on the cover of Business Week that wrote, "It's hard to imagine a less corporate setting than the often bizarre online virtual worlds such as Second Life. But to a surprising extent, mainstream businesses are already dipping their toes into the virtual water." Second Life, whose player base was only 30,000 a year ago, is undergoing a remarkable transformation from a little-known hobby for geeks to what can now be defined as almost-the-edge-of-the-outer-fringes-of-mainstream.

Second Life is still no MySpace.com in its mass appeal, but among its residents are high-level executives, writers, journalists and the rest of the public-opinion-shaping digerati. As far as the virtual social networking applications go, it has been able to avoid many of the problems plaguing the popular online teen hangout. Second Life has corralled everyone under the age of 18 into a walled garden impermeable to adults, solving the issue of child safety before it had a chance to arise. Its business model relies on subscriptions instead of advertising for revenue -- Second Life sells what it calls land but what in effect is server space with game templates. This has allowed the Second Life makers at Linden Lab to adopt a laissez-faire approach to all marketing activity that goes on inside their game. Every player can advertise anything without having to pay the company, and becoming a resident is as easy as downloading Second Life software and installing it on a sufficiently powerful computer.

For the uninitiated, here is some background. As mentioned earlier, Second Life (SL for brevity) lacks any overarching objectives (kill the monster and save the princess) and scoring, and is technically not a game at all. Linden Lab insists on defining it as a 3-D virtual world, but a rather fitting description was offered by Wagner James Au who spent three years as SL's embedded journalist: "[I]t's just a weird cross between a 3D development platform and a chat program, AutoCAD meets the Sims." The world sprawls across hundreds of servers, called sims, that are all connected into one grid. Unlike many other massively multiplayer games, SL is not divided into parallel realities or shards, which means that all players can see each other regardless of the server on which they are located. All of the game assets, its avatars, buildings, land and everything else, are hosted on Linden Lab's servers so the only way to experience the world is through an Internet connection. The only thing that resides on the player's computer is the so-called client that visualizes the world-related information and is best thought of as a specialized 3-D web browser. The client also comes with editing and scripting tools that allow players to create, edit, color, texture and animate three-dimensional objects, and add lighting effects. This particular capability combined with the in-world economic infrastructure that facilitates trading and stimulates it by making the game's Linden dollars convertible into the real currency is what drives the players' creative and entrepreneurial genius. The introductory kit for new avatars contains some pants and shirts, a few household items and, significantly, a basic shopkeeper kit complete with a small booth, a showcase and a blank signboard.

On any single day, the value of transactions between players tops $100,000 in real-world money. Everything imaginable is for sale: cars, trucks, houses, castles and skyscrapers, clothes, avatar bodies and body parts, hair, shoes, flowers, guns that shoot watermelons, flying cows, mountains, theme parks, tornadoes, holodecks and things unmentionable in a thesis. If something isn't available, someone will design it for you. The stores are abundant and commercial activity continues outside the world's boundaries on the websites set up by entrepreneurial residents.

The supply of goods is so high and the competition is so strong that the world's economy warrants its own advertising infrastructure. SL businesspeople whose real-life careers are often lie in unrelated fields and whose knowledge of advertising practices might have been limited are quickly learning the skills of copyrighters, art directors, merchandisers and media planners all at once. For them, an in-world magazine packed with business advice was launched in August of 2006.

Design Your Own Advertising

Many SL companies have already built what can be objectively regarded as brands in the sense that their business or product names are highly recognizable, associated with a particular image and can command a price premium on perceived product value; Betsy Book in her paper profiled two such SL brands and the strategies behind them. Strong brands can be found in many different categories: from clothing to homes, from avatar design to digital interactive genitalia.

While players can advertise their wares on the SL's official classifieds listings, many more turn to the world's independent advertising industry. They can contract services of design firms or purchase hi-tech signboards that float, rotate and flash in mid-air. They can hire one of the many modeling agencies to have their in-store signage professionally decorated. (While there are still no highly recognizable super-model names in Second Life, players with a rich collection of scripted modeling poses and an outstanding avatar design command hourly fees that can easily cover a month of rent of an in-game castle.) Shopkeepers and club owners can equip their businesses with any number of automatic vendors, sales robots, greeting systems, pagers, and camping chairs that pay residents to spend time in their establishments. Many give away free merchandise along with a business card and a bookmark to their location, or hire hosts and event managers to run their promotions.

The SL advertising market is booming. A player whose in-game name is Ruthe Underthorn has created MetaAdverse, a network of billboards placed throughout the world in high-traffic areas such as malls and clubs, and its technology can rival Massive's or IGA's in technical sophistication. Property owners place MetaAdverse's signs on their land for a 70-percent cut of the revenue. Advertisers feed their messages to the billboards belonging to MetaAdverse and the amount they pay depends on how many people have faced the sign directly, for how long and from what distance. In my exploration of the world, I have discovered at least three other billboard networks competing with MetaAdverse.

As the SL's technology evolves, new media forms come to life and with them -- new advertising opportunities. Live streaming radio shows developed specifically for the game sell advertising time, and so do in-game newspapers. Potential for video advertising exists as well; many SL homes are equipped with TV sets that stream video clips and some entrepreneurs sell ad time on those as well. TV shows with their own machinima production have also started to appear as the game's creative population grows.

Like many other games that can be modified by players, Second Life is peppered with user-created objects carrying real-world logos. My own inventory includes a larger-than-life bottle of Absolut vodka, a Corona t-shirt, an entire Hooters outfit, a pack of Marlboros, a Mac laptop, a Honda motorcycle, a case of Mountain Dew, a pair of Elmo slippers. Vending machines giving away or selling Coke, Pepsi and common snacks are a common sight in SL clubs; one can be bought for about 30 American cents. Replicas of NASCAR racing cars are emblazoned with logos of their real-world sponsors. All this brand equity is built on pure enthusiasm without a dollar spent on product placement by the trademark holders.

I have once stumbled across a resident-run store that sells iPods, Shuffles and Nanos that come preloaded with a set of popular songs (I bought instead an outfit that transformed my avatar into a walking iPod silhouette ad.) On another occasion, I rented a real-world movie from a Blockbuster-looking store. The success of these businesses - the movie store was part of a large and supposedly profitable chain -- or their very existence indicates that Second Life can become a model for content distribution that is based on a curious paradox with a new twist to Nicholas Negroponte's model of bits and atoms. When viewed from the outside, all of Second Life's assets can be considered "content", and the "bona fide content" -- music and video -- even more so. Yet when viewed from within the game, this "content" acquires certain tangibility and the assets become objects with their own volume, mass, clearly defined boundaries and often a price tag. Within this new coordinate system, content distribution as perceived from within SL seizes to be the process of streaming bits and once again becomes the task of shipping atoms that can be counted, tracked, and locked up when needed. Second Life provides a theoretically unbreakable way for item creators to limit distribution and modification of their wares by marking them with any of the three flags "no copy", "no modify", and "no transfer", and in this sense the objectified music and videos are no different from shirts and coffee mugs. SL thus becomes an overarching meta-DRM system: the only way to copy a movie marked with "no copy" and "no transfer" flags is to screen-grab the entire game from the outside.

The real meets the Second Life's virtual in many other ways. The tribute to Pink Floyd takes shape of a small hut covered all over with the band's art, with a continuously running soundtrack inside. A similar monument to Grateful Dead is a dizzying complex complete with a hot tub inside a spinning psychedelic globe. There are replicas of individual famous buildings -- such as the Twin Towers -- and the whole blocks of Manhattan, San Francisco and Amsterdam. Residents are also recreating famous fictional spaces -- the Second Life blog wrote about Counter-Strike and Mario Brothers levels built in SL's construction areas, and there are many more. One island sells avatar bodies modeled and equipped after real-world movie characters including the entire cast of Harry Potter. For a modest amount of money, you can have your avatar's body custom-made to resemble any celebrity, from Lenin to Johnny Depp. A dedicated group of players regularly puts out public tribute U2 concerts where avatars closely resembling Bono, the Edge and the rest of the band are animated on stage in sync with the streaming soundtrack.

Modding Corporate Style

The world's creative flexibility coupled with the pioneering spirit of its residents makes Second Life an attractive sandbox for advertisers willing to experiment with new ideas that might be difficult or costly to try elsewhere. Some are already taking notice. The Wells Fargo bank built a private Stagecoach Island area designed to educate kids on the basics of money management (the company later moved the island to a similar environment, Active Worlds, citing technical issues). BBC runs an SL studio where it records regular shows for broadcasts in the outside world. The movie giant 20th Century Fox organized an in-game promotion of its X-Men sequel. Warner Brothers threw a release party for its artist Regina Spektor. Major League Baseball put together a simulcast of the Home Run Derby on a specially designed stadium with the real-time reenactment of the game. One day, we might see TV commercials played out in a similar theater-like manner instead of being shown on a flat screen, or bump into artificially intelligent Burger King mascots handing out whoppers at virtual sports events. In its cover story on Second Life, Business Week described many other ways in which real-world companies engage with the world. Head of technology at an underground tank testing firm uses the game as a training environment for new hires. A PR company set up SL headquarters to "provide companies a fascinating way to build new bridges to their key audiences, whether for marketing purposes, customer support or customer feedback." Residential architect Jon Brouchoud created, textured and showed a 3-D model of a real house commissioned by his clients, all in Second Life.

This, of course, is only the beginning. As the platform's technological sophistication and its links to the outside world grow -- Linden Lab is working on integrating a standard web browser into the game and sending emails into and from the world is already possible -- so does its attractiveness to outside businesses. One can imagine a travel agency building models of its destinations, from hotels and cruise ships to exotic islands. Ikea could work with the fan base to showcase its catalog in three dimensions and let players try its virtual furniture in their virtual homes. Universities, some of which are already building in-world presence, could conduct open houses to court prospective students.

If a single 3-D game-like platform emerges and gets widely adopted and if Second Life

and similar worlds are indeed precursor of the three-dimensional web to come, advertisers would be better off by exploring the opportunities and challenges these environments present while the scale is still small and mistakes are affordable.

The challenges will be many. One issue that is likely to loom big is privacy. The extreme level of detail with which games and avatars can be tracked and measured is both a goldmine and a ticking time bomb in the hands of marketers. It is a goldmine because virtual billboards will soon be able to tap into the enormous databases that have records on every single transaction, utterance and head nod of every avatar and serve individualized messages based on the customer's entire life history in all its complexity. When AOL inadvertently released a database containing results of millions of search queries submitted by more than half a million users, called it "catalog of intentions". If Paul Hemp is correct in his suggestion that the way avatars dress up, behave and socialize tells us something about their owners, then worlds such as are catalogs not only of intentions but also of fantasies, fetishes, beliefs, aspirations and repressed desires that have found their symbolic manifestations -- everything marketers today are trying to suss out with the help of focus groups.

It's a ticking time bomb because Second Life is much more Orwellian in its omniscience than anything existing on the public Internet with its decentralized structure. On the Internet, AOL may know something about the user and Amazon may know something else but the two don't share their information to create a holistic picture. Second Life, on the other hand, is a proprietary walled and self-containing garden whose infrastructure and intelligence gathering spans the entire user cycle from shopping to private instant messaging.

On the micro level, designing a commercial experience in a 3D environment is likely to be different from developing a "flat" web shop. Thinking in three dimensions of a social world endowed with physical properties will mean calculating the ceiling height, for example, to accommodate for customers who prefer flying to walking. While a popular web store may serve thousands of customers simultaneously, each of them shops from his own parallel on-screen universe with little interaction with the others. Clothing stores in Second Life, on the other hand, are more like real-world malls filled with customers sharing impressions and offering fashion advice in real time. Merchandising -- the science of displaying goods on store shelves -- will have to learn how to retain the visual appeal of the real-world racks while combining it with the effectiveness of online search and categorization. When sabotage (hacking, phishing, scamming and denial of service attacks) of online stores is a major concern, the solutions are also evident if not always feasible -- patch the hole and call in the cops. But what are shopkeepers to do if their stores are blocked by avatars protesting unfair trade practices?

Speaking of unfair trade practices, the foray of real-world businesses into Second Life has not been greeted with universal excitement, although the reasons for players' wariness are changing. If two years ago a private island where a marketing company had set up shop was picketed by SL residents because they felt the intrusion would ruin their carefully crafted escapist haven, today their concerns are more pragmatic and are not likely to go away as easily. Some fear that their budding SL family businesses will have to compete with cash-rich and marketing-savvy business empires for which Second Life is just another foreign market ripe for expansion. Others think that real businesses will upset the virtual world's entire fragile ecosystem. Today, in-game entrepreneurs make and sell their wares and services at prices that are significant in the game's context but the return on their time is way below the minimum wage when converted into dollars. Tomorrow, these entrepreneurs will be hired by the big businesses to produce the same -- but branded -- items and will be compensated for their efforts on the real-world pay scale, never to return to their original trades.

When Starwood Hotels and Resorts announced that it was bringing into the virtual world a model of its new Aloft hotel, a resident who runs a real-estate business of selling plots of land and renting out apartments in Second Life, Prokofy Neva, wrote in his comments to a blog post:

It's not about me or others in the land business. [...] I'm trying to use my experience to speak to the much larger issue going on here: big business from RL, helped by a few who were able to leverage their experience into "RL-in-SL companies", are displacing the *need* for business inworld and displacing *the transactions* of business as well as the Lindens *change the features and the client and their orientation toward these kinds of businesses, and not inworld customer-created businesses.* [...]

I wouldn't be able to see what is happening so clearly if I hadn't been able to see what happens to countries in the real world, like a Georgia or Ukraine, when the indigenous economies were able to sustain people without them leaving for guestworker status elsewhere or be drawn into sex trafficking, before the World Bank or Chevron or whatever came in and displaced their economies. This is a worldwide phenomenon, part of globalization.

SL is now globalized."

With Linden Lab actively welcoming the expansion of big businesses into its realm, perhaps it's time for Naomi Klein to revise her No Logo to include a chapter on free-trade zones and sweatshop labor of the virtual third world.