Starting Your Business' Second Life

By Heather Clancy

If you've got a product that's hard to show off in person or your customer demographic skews thirtysomething, start thinking in 3-D. While skeptics write off virtual worlds on the web as arcades for young folk, research firm Gartner Inc. estimates that by 2011, 80 percent of active internet users will have an identity in a virtual web world. At any given moment, roughly 35,000 people visit the most hyped of these communities, Second Life. Linden Lab, which hosts the environment, estimates that 35 percent of Second Life visitors are 26 to 35 years old and approximately 75 percent are male.

Adam Broitman and Raman Kia, directors of New York City marketing agency Morpheus Media, paid $1,700 last year to buy a Second Life "island" so they could experiment on behalf of their entertainment and fashion clients. One test involved a simulcast of a live rock concert in New York City to avatars visiting their island. Another New York City agency, TMP Worldwide, uses Second Life to host job fairs and help clients such as eBay and Sodexho interview recruits.

Branding consultant Janet Schijns, CEO of The JS Group, says it will cost you about $50,000 to hire designers who can develop a virtual-world presence, although a less substantial presence can cost you half as much. But if you're not willing to dedicate human resources to interact with visitors, it'll be money wasted. "It's not an event. It's not a world," she says. "It's an experience."

Brian Haven, an analyst with Forrester Research Inc., cautions entrepreneurs not to think of virtual worlds as just another place to sell products or services—at least not yet. Second Life in particular is hard to navigate, and the number of avatars that can visit an island at the same time tops out at about 80. Still, larger companies in the retail, travel and automotive industries—American Apparel, General Motors Corp. and Starwood Hotels & Resorts, to name a few—have fostered goodwill with customers and business partners alike by testing products and selling virtual products in Second Life.

The web is a brave new world for marketing.

Heather Clancy, a freelance journalist and consultant, has been covering the high-tech industry for close to 20 years.

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