Virtual World Marketing 101

Virtual Marketing 101
Vio Business Series #2

INTRODUCTION

When it comes to marketing your business or organization in the virtual world practically the same rules apply as they do in the real world. In order to reach people who may become your customers, you need to get your value proposition in front of people. There are ways to use real life marketing resources to market your virtual business or organization, but for the purpose of this presentation, we will focus on virtual resources.

There are some things that make marketing in the virtual world different than marketing in the real world.

1) Nature of the virtual marketplace
2) Dynamics of virtual relationships
3) Improving economies of scale
4) Marketing resources

Making an effort to understand these differences and catering your marketing campaign to the virtual marketplace will go a long way in determining your success.

THE NATURE OF THE VIRTUAL MARKETPLACE

Many companies in the virtual world are real-world companies who use the virtual world platform to promote their product or service to a global market, much like they do on the Internet through web sites and other new media. Some companies in the virtual world, actually only exist in the virtual world, providing a virtual service or virtual product.

The marketplace within virtual worlds is similar to the marketplace reached by web sites and other online forums. You are reaching people from around the world in the comfort and security of their homes, sitting behind a computer. You are communicating to them using text, images and sound.

The communication experienced in Virtual Worlds is a deeper (more dimensional) and more interactive visual format. With the element of human Voice introduced, interaction becomes more social and impactful.

Although the marketplace in the virtual world tends to be global, it also seems to me to generally consist of a demographic of younger adults who visit for entertainment purposes, and older adults who visit to experience a more youthful virtual lifestyle. The motivation for the great majority of the virtual population is to have fun and to socialize from the safety and comfort of their homes. Business-minded people are making headway in the virtual world, but if you want your product or service to be noticed, you may want to consider how to tap into the entertainment aspects of the virtual world with your marketing efforts.

For example, a real-world financial services company can do something like:
1) Purchase a banner at a virtual concert event
2) Sponsor a virtual fashion magazine
3) Sponsor a virtual music stream
4) Create and sponsor a virtual car race event.
5) Host a financial workshop for virtual club/entertainment venue owners.

Look at your own virtual business, and think of ways you can tap into the entertainment realm. If many people view the virtual format as a game, then it may be best to incorporate your message into "the game" so it becomes "relevant" to your target market.

DYNAMICS OF VIRTUAL RELATIONSHIPS

In the real world, one of the most effective marketing tools is word-of-mouth. People value communication from people they know far more than from paid advertising. In the virtual world, word-of-mouth can be even more effective, as things happen and move at a much faster pace in the virtual world.

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Let me illustrate a real example:

I can tell you about a brilliant scripter named Loki Ersetu who has created something really helpful to me as a business person in the virtual world. Meeting people and networking is very important in my line of business, and when I am online, I want to know WHO is around me online in the same area, because they may be interested in business in general, or perhaps my business. I want to be able to strike up a conversation with them quickly. So nothing is more helpful than a HUD (heads up display) script she created called LYRS. It pulls up on the screen in front of me the names of anyone who is about a half a Sim away from me in distance, and tells me how far and in what direction they are located. This makes it easy for me to send them an instant message or look up their profile quickly and before they leave the Sim.

Loki is now creating an upgraded version of the LYRS HUD script that allows me to click on the name in the HUD to pull up their Profile, so I don't even have to type their name in the Search tool. The first version sells for only 100L (US 3.7 cents?) and the new one, which REALLY saves time because it is a much more complex script, will cost about 1,000 L (US $3.75) The time it will save me is worth far more than that. so it's a no brainer for me.

I now share that with you in this room. Or I can even throw a spontaneous party of about 50 of my virtual friends, which can be created within a matter of minutes. I can share about this hot new script, and even use it to send IM's to everyone. Then I ask them to go home and invite all of the friends on their Friends List to see them and check out the new product. Through the power of word-or-mouth and viral marketing, this script can be wanted by thousands of people in a matter of a few hours.

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Conversations happen fast in the virtual world, and can be easily supported with files, images and links to web sites to illustrate the message. Social structures exist in the virtual world with great variety, and maybe to even a greater extent as people feer more free to express themselves in the virtual environment. Also, people are leaders or followers, and in the virtual world, people often feel more freedom to take on both roles. It doesn't hurt to establish yourself in a leadership position, or partner with those who are already established to share your message.

IMPROVING ECONOMIES OF SCALE

If there is one thing you notice quickly in the virtual world, is the relative cost of objects and services is much less than in the real world. Cost of something is relative to the perceived value. You may notice that virtual services, like advertising in virtual publications, or banner in shopping malls costs very little. There are several factors at play here:

1) The reach (exposure) may not be very high.
2) The reach in virtual space is much harder to track and validate than in RL media
3) The cost benefit of customers of virtual services may not be very much (a sale in the virtual world may only provide a few pennies)

As an advertiser, one may not be able to do much with the first or second factor. Perhaps we can provide more valuable and attractive content to the SL media to increase interest and viewership, but that is something that needs to be developed across the board by many people over time. We can have a more direct effect on the third factor.

The return on investment on your advertising can be much greater if we can justify higher prices or attract a very large base of customers. If the perceived value of things in the virtual world (seen as a game by many people) is hard to justify, then try to find value for your product or service as it relates to the real world. This may be a stretch for some products, but you may be able to adjust the way your product or service works in order to be tied to a function in the real world.

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Example:

Bill sells furniture in the virtual world. He sells exquisite bookcases. An opportunity is to position the bookcases as a "Real World Money-Generating Affiliate Library System" for virtual world residents. He creates a system of customizeable books that fit perfectly in his bookshelves, that can link to any URL, but for this purpose can link to affiliate links selling books, services and products on real world web sites. He can marketing this bookshelf and linkable library system in-world as a way to use virtual space to generate real revenues from real world affiliate programs. He offers instruction and help with setup, and even a list of real world affiliate programs to link to.

Bill is now no longer selling bookshelves. He is selling a money-making system to the virtual marketplace. The value of his bookshelves, which once sold for 500L, can easily be justified at 5,000L. Plus he can sell components along with the bookshelves to improve the system.

Bill also has the opportunity to sell to the real world marketplace, a money-making affiliate program tool using a unique "virtual technology," thus expanding the number of people he can reach. With the ability to make at least 10 times the revenues for his product, and probably get a lot more people interested, his investment into virtual marketing will seem insignificant.

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MARKETING RESOURCES

Marketing resources in the virtual world is largely underdeveloped. As the business grows its presence and financial influence in the virtual world, more efforts will be given to virtual marketing tools and systems. For example, there is no online PR newswire to get press releases to all of the media in the virtual world. Vio is actually in the process of building such a system. Until the developers of this virtual world provides a more plexible format, we will be using their framework of a GROUP membership and communication.

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Here are some examples of Virtual Marketing Resources:

1) Image Consultants, Photographers, Designers and other Creative Professionals: Before paying to share your message, refine it and make it stand out. It is always best to use professionals and experts to refine the image you project in the virtual world. We have great resources on Vio, such as Alexi Mizin (image consultant) and BigTee Goodliffe (photographer).
2) Virtual Publications (magazines and newspapers): Most are entertainment-related, but there are some business-oriented publications such as Venture Magazine published by Carter Giacobini. Also check out SLInWorldToday published by Natalie Niven.
3) Virtual Radio Stations and Radio Shows: Have your message heard, and not just seen. There is are pioneers in this industry on Vio such as Sean Cinquetti, Novad Rovio and Spinner Voom.
4) Groups: There are thousands of Membership Groups covering a wealth of topics and interests. This is a great way to get to know people interested in what you have to offer. If you can't find one, create your own. Also, create a Group just for your business and give people incentives to joining your group. This will give you a nice customer database you can contact with special deals and promotions. Join as many business groups as you can handle. There are quite a few with large memberships.
5) Banner and Billboard Space: These may not be as effective in creating direct sales, but they do build brand awareness and trust over time. You can find the most popular Sims in the virtual world and ask for billboard opportunities. Always ask for authentic Traffic Count and make sure they are not pumped up by TrafficBots. Virtual world-related web sites and blogs offer great banner ad opportunities. Check our SLExchange.com and also RLSL.org blog published by Peach Asbrink.
6) Networking Events and Seminars: This is, of course, my favorite for obvious reasons. Attend seminars and networking events. Get to know as many people as possible and find out what they need and what they offer. You may not need what they offer, but you may be able to refer them to others you meet. What comes around goes around.

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When agreeing to use a marketing resource, get all of the details up front and get an agreement in writing.
That can be a real world agreement that is received by fax or mail. Or it can be as simple (but not as binding) as a Notecard. If you experience any disputes, you should use proven dispute resolution providers in the virtual world, such as OliveEue Sholokhov.

BACKGROUND

About The Speaker: Xander Newman has owned Virtual Innovative Opportunities (VIO) since April 2007, a virtual business community and incubator in Second Life. His expertise is bringing together businesses and resources in SL and RL. In the real world, Xander Newman has been an expert with Internet technologies since 1995, owning his own Internet development and SEO company. He also has a Bachelor's degree in Advertising from the University of Texas. Xander is trained in creating organizations and team-building, and by combining all of his skill set, he has been able to:

1) Co-found a publically-trading Internet auction company
2) Create two non-profit organizations, including the largest volunteer organization serving the needs of Hurricane Katrina survivors.
3) Create a documentary film
4) Become an advocate for the indigenous (tribal) people of the world, speaking in front of world leaders at the United Nations in May 2004.
5) Co-founded a business consortium bringing companies to China for joint venture projects.

In his view, the secret to his successes in life come from making his goals about the benefit of others, and surrounding himself with a variety of talent and expertise.

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For more information on this topic, feel free to contact Xander Newman or any of the Vio Team.

Xander Newman
Alexi Mizin
Kalvin jefferson
Slatestone McCall

©Copyright 2008 Virtual Innovative Opportunities. All rights reserved.