THOUGHT (aka Centric's Blog)

So, today we’re proud to announce a much deeper relationship between Centric, HiPiHi, and 3Di–a relationship that brings unparalleled marketing, story development, and technology development expertise to the Chinese virtual world of HiPiHi.

And we’re aiming straight at the heart of the entertainment market.

Why? Well, when people get into virtual worlds, they get really, really into them. As in, television viewing shrinks, conventional web browsing shortens, and other forms of media go by the wayside.

Long-time gamers aren’t surprised, but others are concerned: What does this mean for the future of entertainment? Is this another blow to theater attendance? Or is this a fringe effect that we shouldn’t worry too much about?

Actually, from our point of view, it’s a convergence of almost everything that’s happening today–from marketing to entertainment and beyond.

From the marketing point of view, we’re moving past the day when you could pound simple messages into someone’s head over and over, day after day, for 40 years, to create powerful brand icons. Marketing today is 2-way. It’s give-and-take. It’s a conversation. And what sparks conversation are powerful stories.

At the same time, entertainment today is rapidly moving past the "pack them into theaters" method of distribution. Today, people want to play in the same worlds as their entertainment. They want to see the stories they create make it out to the big screen. They want to talk with, interact with, and extend their favorite worlds, places, and characters.

And virtual worlds like China’s HiPiHi are the places where the most interesting interactions will take place–on both the marketing and entertainment side.

You can read the press release for the full scoop.

As you may have seen from our press release, Centric has aquired Green Apple Media, a Webby Award-winning studio that specializes in developing rich media sites for entertainment clients.

"Now, what the heck did you go and do that for?" you ask. "I thought you were an agency working in social spaces and virtual places."

Yes, we are. And skills on the rich media side of things are more important than ever for both areas of marketing. Almost no virtual world project we’re currently doing doesn’t include some aspect of rich media and web development. In fact, many of them look like complete brand or product launch campaigns, from the development of identity to collateral to website to social media program to virtual world development to launch and post-launch marketing. So it makes sense for us to bring a leading Flash and motion graphics development studio in.

And it makes sense to them. Steven Apple, founder and CEO of Green Apple Media, told me, "Studios are looking for a complete solution now. The website is the start, now we have to span the social networks, and even reach into virtual worlds." So now, as Centric’s Vice President, Business Development, Steven Apple has the team he needs to give them a complete promotional solution–from conventional interactive development to virtual worlds in China.

So welcome Green Apple Media to Centric, and welcome the additional capabilities they bring!

It’s funny.

I was talking today with a photographer friend of ours who’d stopped by to see our office, and we got to talking about 3D printers and virtual worlds. Yeah, I know. I don’t know how the conversation gets there, but it always does.

And I was struck by a funny thought, and said: "You know, you can buy a 3D scanner, a 3D printer, and high-end 3D modeling software, and a high-end computer, for about the same price you could buy a black-and-white desktop publishing system in 1987."

And our photographer sat back, looked really thoughtful, and said, "Wow."

Wow indeed.

I remember 1987. I remember the weird kid in one of my creative writing classes, who said, "Yeah, spend $10,000 and you can typeset your own stuff! Do your own magazines! Even output, like halftones and camera-ready art!"

And I remember thinking, "Wow, we are really living in the future! Look at all this technology! We do our own typesetting. We can Upset the Established Order!" I didn’t think about doing color photography or anything like that on a computer, much less internet development or virtual worlds.

And so, sitting with our photographer friend, I said, "Apply that same curve to our 3D scanner/printer/modeling scenario. What are we going to be doing 20 years from now? Taking a file called ‘Steak, Angus’ and whipping it out on our super-duper 3D replicator from a jug of assorted organic molecules from the local Costco? Growing laser-based 3D immersive eyeset displays from free designs floating around in virtual space, thanks to a helpful African student?"

And he just sat there with a blank look and said, "But, isn’t the resolution of 3D printing not that great? I thought it could only do a few simple things?"

"Just like those giant LaserWriters and Mac Pluses of 1987, you mean," I said, gesturing at HiPiHi on my laptop screen.

And our photographer friend got real quiet.

Because even if we’re already living in the future, there are way more suprises to come.

Okay, so now people spend an average of 30% of their total media time on digital media.

"Digital media," of course, being a general advertising industry expression for "all that online stuff, from Yahoo to YouTube." And "total media time," meaning "all the time they spend with every kind of media, from newspapers to virtual worlds."

Not bad! For a medium that most advertisers dismissed with the wave of a hand 10 years ago, online has grown to almost 1/3 of our total media attention.

No. Wait. Let’s say that again. Almost 1/3 of our total media attention goes online.

Now, sit back and think about that for a while. Ten short years have brought massive changes. From 65 million internet users total in 1997, to over a billion. From zero percent of our media time, to 30%. From huge, heavy, tethered-to-the-home PCs to ubiquitous wireless for laptops, and handheld devices that are designed for media consumption. The world has already changed.

What hasn’t changed is spending. Today, companies only spend about 5% of their media budget online, on average.

Let’s say that again, too: they spend 5% in a space where people spend 30% of their time.

Why is this? Is it some conspiracy by the giant agencies to keep television advertising going at all costs? Are advertisers afraid of online? Is it that their target audience is still more in front of the tube (er, panel) than the computer or the phone?

The short answer is there are no easy answers. A modern media mix will encompass both online and conventional media, skewing towards one or another based on the target audience. Total spending depends on the brand, its goals, and its current campaign focus. In some cases, it will skew more towards conventional media than seems appropriate.

But, 5%!

Yeah, I know. And I’ve started to wonder if the smaller-than-expected spend might be due to a simple factor: ROI. Not ROI in terms of "ROI is less for online marketing," but in terms of "ROI is measurable for online marketing."

Or, in other words, "I really don’t want the ROI of my marketing measured."

Conventional advertising is great that way. You really can’t tie a TV ad in with any specific purchase. You can wave your arms and talk about impressions and Neilsens and overall averages, but you can’t say that Joe Consumer and his wife Martha went out and bought a new Hoover because they saw an ad on the tube.

Online, you can. You can easily produce numbers like "our average cost to acquire a new customer is $17.28, for a $103.22 average sale through our online store." Which sounds good, unless your average cost to acquire a new customer is $408 for a $57 average sale.

The irony is that $408 cost for a $57 average sale might be a complete success in terms of conventional media, because the campaign delivered a $1.75 CPM, or $1.75 cost per thousand impressions.

And, if we could measure deeper into online, and track the people who simply saw the banner ad, then went to a brick and mortar store to purchase, that $408 for a $57 sale statistic might be completely incorrect. If we could track out a month or more, across all possible online purchase venues, the numbers might get even better. The campaign might be extremely successful, in terms you cannot measure.

But the $408 cost for $57 sale is what you have to bring to your marketing management, because that is what you measured.

And there goes what might be a highly effective campaign. Killed by ROI.

So, let’s ask ourselves: is this what is happening, in aggregate, online? Is this why spending doesn’t match media use? Is ROI all that it’s cracked up to be, with our limited ability to measure it?

November 8-11, 2007: X|Media|Lab Beijing

Ken Brady, our General Manager/Asia Region, will be one of the mentors at X|Media|Lab Beijing: "Creative Economies, Digital and Virtual" running from November 8-11 at the Great Hall of the People and at the Cyber Recreation District. If you’re in the area, look him up! His HiPiHi username is Neko.

December 4, 2007: Harvard Workshop on Virtual Worlds

Jason Stoddard will be speaking at Harvard on "Virtual Worlds: Enabling Digital Humanities" in a 2-hour hands-on session from 9-11AM. Also appearing will be David Rumsey, of David Rumsey Maps, a client that Centric has been working with to deliver unique virtual world experiences based on current-day and historical GIS data. Contact Jason via email, Second Life (Fallon Winnfield), or HiPiHi (JasonS) if you’re in the area!