THOUGHT (aka Centric's Blog)

This is how it goes. As soon as I say, "I’m going to cut down on the speaking schedule this year, so I can concentrate more on business processes," opportunities start popping up.

First, I’ll be appearing at The Marketing Forum again this year. Here’s the topic:

Lessons Learned from Social Media Marketing: Where it Works, What it’s Good For, and How to Measure ROI

Social media now drives as much traffic to sites as Google does—so if you spend on search, you should probably be investing in social media marketing. But where? There are dozens of venues to explore, and many different tactics to choose from. How is it best used? And how do you measure the results against traditional media? In this session, we’ll explore:

• Learnings from case studies from companies that include Warner Brothers, HP, and Freestyle
• Emerging best practices in the social media space
• How to decide when social media is right for your marketing mix—and which venues you should target
• Best ways of measuring returns, from CPM to ROE (return on experience)

 Second, I’ll be giving a similar presentation to the Internet Strategy Forum here in Los Angeles:

Virtual Reality Check: Where Do We Go From Here?

Last year, Second Life came to the forefront of social virtual worlds with explosive growth and entries by high-profile brands. Now, growth has slowed, and brands as a whole have struggled to find their place. At the same time, 2D and 2.5D worlds for teens are booming, MMOs are hot, and there are new, open-source opportunities on the horizon for 3D worlds. What have we learned from this—and what does it mean for the future? In this session, we’ll examine:

• What worked, and what didn’t, in 2D and 3D virtual worlds
• What the landscape looks like right now
• Where the virtual world roadmap might take us in the next 12 months
• Practical strategies for deciding what worlds—if any—are right for you
• Results that you might expect—and how to measure them

If you’d like to have a version of either presentation given at your own company or organization, let us know, and we’ll see how we can set it up!

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!

Yes, I know, I am a terrible person for mentioning the future of virtual worlds, then leaving you hanging. But would you rather read a blogpost or a novel? There you go.

The panel on the Future of Virtual Worlds was interesting. I shared it with a writer from CNet, a gentleman who has the task of building the largest virtual world project ever—in China, of course, and the professor who invented the MUD back in 1978. Yes, as in, he has been working in shared virtual spaces for almost 30 years. Text to start, yes, but shared spaces are shared spaces. The 3D is only the furniture.

It was funny, because there was this undercurrent of warning. Paraphrasing: “Be careful what we make virtual worlds into—if we eliminate the gaming and fantasy elements, then we may create a world that is stunningly useful, but in so doing, we can make it banal. We may wonder why people willingly spent 3-4 hours a night in virtual worlds today, 20 years from now."

And yes, I can see where this perspective comes from. I’d expect the first breakout virtual world results to come from one of two or three places, and the most likely one is in business applications. After all, we aren’t that far from a credible WebEx replacement in virtual worlds.

But if your virtual world is only for business meetings, how fun is it?

So if we get a big success in virtual worlds, and business rushes in to build its virtual worlds, do we kill what they could become?

Of course not. This single-track thinking is exactly akin to what happened in 1994-1995, when the internet first entered the public’s consciousness. Back then, many, many internet users wanted to Save the Intartubes from the Evil Corporations! While early web developers wanted to Pave the Way for Corporate Uptake! Both were single-outcome scenarios. Either the potential of the internet to unite humanity and give us unlimited opportunity would be destroyed by the corporations, or the internet would never become a valuable marketing medium.

Well, we know what we got. Both.

Today’s internet gives us opportunities unimaginable when I was growing up. I can talk for free to virtually anyone in the world. I can share my art with everyone. I can shoot video and put it on a network that has reach and engagement greater than any television network. In minutes, I can set up a blog with articles or stories that can be read from Tokyo to London. I can start an online business and immediately begin selling stuff. I can develop code, and build a company around it. And, at the same time, it is a corporate garden, filled with marketing.

So let’s not be so negative about virtual worlds, and about corporate involvement. It’s unlikely that today’s internet would have been what it was without the large corporate investments which drove awareness, uptake, and content. Virtual worlds need investment to drive awareness, uptake, and content—and that will drive the fun, creative, and visionary applications of virtual worlds at the same time.

“That’s great,” you’re saying. “This guy is a helluva politician. You haven’t told us one single concrete thing about the future of virtual worlds.”

Okay, okay. I’ll share some of my pre-conference notes on virtual worlds in the 2, 5, and 10 year timeframe.

2 years out:

• There are still a lot of different worlds, but we know who the gorillas are going to be
• There will be at least one major breakout, in terms of RL corporate $ sales, possibly coming from fashion or business enablers
• The line between social networks and virtual worlds begins to blur even more, with social networks moving into, or becoming, virtual worlds

5 years out:

• There will be at least a half-dozen major companies that have IPOed who started as metabrands
• We will have made major strides in quantifying an attention/propagation economy balanced by a widely-accepted reputation metric
• We will have some businesspeople using AI-backed avatars as proxies, extensions of their “real” self. Don’t talk to me, talk to my avatar—and convince it that I should talk to you. Formulae for “getting past the avatar” will be the new SEO of the day.
• Several purely user-created storylines in virtual worlds have now spread out into the real world, becoming linear movies, television/mobile series, comic books, and novels
• We’ll see the first wear-it-always augmented reality overlays (eyePods) and inexpensive, compelling immersive interfaces for entertainment and gaming

10 years out:

With accelerating change, the next 10 years may have the same amount of change as the last 20. In 1987, computers had 80286 processors struggling to display 16 colors at 640 x 480 resolution, cellphones weighed 20 lbs and were carried on shoulder straps, fax machines were thousands of today’s dollars, and there was no Internet as we know it. It would be difficult to explain the most basic concepts of a world-spanning data and communication network, let alone the fact that the largest “television” network consists of short user-generated video shared on it. Heck, you’d have a hard time explaining that the USSR was gone. But hey, here’s a shot at a couple of things:

• By this time, the virtual world revolution will be larger than the internet revolution at its 10 year birthday
• AI may be good enough to have our avatars stand for us
• We may have made significant progress in “uploading” personalities into virtual spaces
• We may see breakthroughs in personal fabrication, leading to a design economy/near post-scarcity economy
• The propagation/reputation economy may be the de facto standard for marketing and transactions—to the point where some people make all their money by sharing

If you want the complete scoop, IM Fallon Winnfield in Second Life or JasonS in HiPiHi.

Okay, it’s nice to be home from London. Actually, it’s not. I really do like London, and could easily live there. Lisa, of course, would insist we still have a flat . . . er, condo . . . in Hollywood, but it could work.

Why was I in London, you ask? Well, I was at the Virtual Worlds Forum. I presented on ROI in Virtual Worlds, participated in a panel on The Future of Virtual Worlds, and was one of the mentors in X|Media|Lab London, where I talked with a number of extremely interesting people with fascinating ideas, including one who may have the answer to popularizing virtual worlds, a person who was asking about the world circa 2025, another who has just introduced an exciting new virtual world platform (see the following blogpost), and a firm that is interested in moving its 2D world for kids into the 3D space. There’s a lot of exciting stuff happening in the field!

“Wait a sec!” You might be saying. “ROI in virtual worlds? Aintnosuchthingforgettaboutit!” or “The future of virtual worlds? How can you begin to predict that?”

Well, I’d say that there IS ROI in virtual worlds. Yes. Today. Right now. Not in the way you can run a Google AdWords program, and say, “Wow, I’m paying $17 for an average $103 sale, so things are going great!” But it’s definitely more measurable, and probably more meaningful, than the ROI you get from your TV, print, radio, and outdoor campaigns.

Marketers love to say, “I got a $5 CPM." Meaning, they paid $5 to show an ad 1000 times. Of course, nobody may have seen the ad. It could have been a 2AM placement on the late late late late b-movie showing. Or a 4AM radio spot. Or an interstitial banner barely glimpsed as one clicks from theit MySpace console to their home page and back again. Good targeting for insomniacs, or people with extremely short attention spans.

But you can’t say. “X people watched that ad, and X people acted on it.” Except in terms of averages and anecdotes. All you can say is that the ad has been shown.

Virtual worlds are arguably more measurable than any other medium. Not only can we get the number of visitors, the time they spent, and the number who came back, we can measure individual user actions. Did they try that neat photo booth? Did they go under the waterfall? Did they take something? Buy something? All measurable. And you can even go so far as taking their avatar name and unique identifier, their UUID, which can be used to determine avatar creation date. This is a rich mine of information.

And it may be killing virtual worlds.

Why? Because the numbers are small. Tell someone you got 5,200 unique votes in 1 day, like we did with the 12avatars.com project, and they’ll laugh and say, “Yes, well, we ran an online contest where we had 52,000 votes in a day.”

When you probe a little deeper, though, things get interesting. Because those 52,000 votes in a day were done from a $1MM push through external media. And all those people had to do was to go to a web page and click a button. The people in 12avs weren’t driven by ANY promotional budget—the campaign was entirely in-world and pro bono, NO media spend whatsoever. And they had to vote in Second Life. On a very crowded 4-corner sim where it was hard to move around because of the lag. People had to spend minutes, or tens of minutes, just to vote.

And yet we had 5,200 votes.

Think about that for a minute. Against painful odds, 5,200 people showed up in a single day to vote in a virtual world. And that’s just the start. When you start looking past ROI, where ROI = “number of people who showed up” to what we call Return on Engagement, or ROE, the numbers start looking a whole lot more compelling. ROE measures much, much more deeply:

• Number of visits
• Number of individual visitor actions
• Total time spent
• Team or teams created
• Devices distributed
• Equivalent impressions (long tail media)
• Value of any mainstream press coverage
• Value of assets generated (vs photos, video)
• Value of the knowledge (vs RL research)

When you add up all of these results for 12avatars, and figure in the cost of our time (at typical agency rack rates), the return on engagement is actually quite compelling. If you’re interested in getting the full scoop on 12avs, just drop Fallon Winnfield an IM in Second Life, or JasonS in HiPiHi.

The kicker? ROE is only the beginning of the value model of virtual worlds. We’re working on a metric we call Attention Index, which could be a way to tie a virtual world campaign directly to exposure, in terms that large advertisers will understand. We’ll let you know more as we get out of the alpha stage on this.

Yeah, yeah, back to the workaday stuff. But hey, some people actually want to see us. So here’s where we’ll be:

Ken Brady, Centric’s General Manager, Asia Region is speaking at the Virtual Worlds Conference and Expo on the subject of international virtual worlds. Look for him on October 10 and 11 in San Jose.

Jason Stoddard, Centric’s Founder and Managing Partner, Strategy is speaking at the Virtual Worlds Forum Europe on Thursday, October 25th, on the future of virtual worlds, and leading a strategic workshop for X|Media|Lab on Friday, October 26th.

Also on the slate is Jason Stoddard, presenting a workshop on virtual world technologies and GIS at Harvard in December. Stay tuned for more information.

When was the last time you got to fly into a party with a Maxim Top 100 girl? Well, that’s what we did last night! To celebrate the launch of the 12Avatars.com calendar contest, Callie Cline was on hand to help us kick it off.

12Avatars.com is a great idea from our friends at Apollo Interactive, who said, "Why don’t we find the most beautiful avatars in Second Life–and do a printed calendar of them?" We said, "No, that’s a terrible idea, we have no idea why you’d want to do that."

Not really.

So here you go–a few shots from the launch event last night. We’ll be taking submissions via our interactive photo booths until September 16, and the calendar will be ready to go on sale by the middle of October.

You can enter here: http://slurl.com/secondlife/Tellus%20IV/210/220/27

More photos on our Flickr here: http://www.flickr.com/photos/centric/

The kicker? The printed calendar is the only one that costs. The virtual version will be distributed free in Second Life, and 100% of the proceeds from sales of the printed calendar will go right back to the distributors or to a real-life charity of their choice.

Thanks to all who came to see us!

Ken Brady and I will be speaking again at Inverge 2007, The Interactive Convergence Conference, on the subject of "Virtual Worlds: Final Invergence?" If you’re in the Portland area, stop by or give us a shout.

The Invergence Conference takes place at:

Gerding Theater at the Armory
128 NW 11th Avenue (at Davis)
Portland, OR 97209

on:

September 6th and 7th, 2007

More information here: www.inverge.com

We’re speaking on the 7th at 1:30PM. We’ll be focusing on virtual worlds as the ultimate media platform, discussing selected case studies.