How brands might exist within Virtual Worlds

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Permalink Reply by Carmen Villadar on May 2, 2008 at 4:36pm

Hi Phil, hmm good question. I too have given some thought after having discussions on this very topic. It was agreed at the end that two of the most important variables that a 'brand' needs to accomplish in order to build customer loyalty, sustain their interest and maintain longevity in a vw are 1. trustworthiness and 2. engaging the customer.

VWs present a different playing field for advertisers, marketers and businesses the like. In VWs, the customer has the control. People are empowered in VWs to create and demand 'unique one of a kind customer-service'. I feel that 'brands' need to explore ways in which to engage people through relationship building i.e. genuine, solid, engaging interactions. I don't think that 'brands' will be as successful in developing a 'bond' with their customers as they are in the real world. I feel that people look for qualities of trust, loyalty and sincerity and strangely, it will be these values that 'brands' need to work on.

How to do that? That in itself calls for much discussion and brainstorming .. so .. let's start it!

I am a member of Adholes.Com - an industry site for people in the AD/Creative/Marketing industry and we could pool and poll good feedback from that platform.

I've tried to initiate interest and comments on VW ad/marketing but many people (in adholes) feel that THAT concept won't come soon so they are not even focusing or worrying about how their existing clients can branch into vw. I think this is a 'sleeping sheep' attitude. Rather than wait for the concept to arrive, they should be the very people who could dictate and steer how ad/marketing/brands can successfully survive in vws!

I'm trying to wake them up. Perhaps four arms are better than one? Let's talk soon.

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Permalink Reply by David Grundy on May 5, 2008 at 6:27am

Phil,

Though I might be overly examining this from a business perspective, an MMO brand should really be about delivering a competitive advantage for the business to the marketplace. The building of a brand in a MMO space being crucially important not only upon initial release, but also for increasing retention ( decreasing "churn") and so forth.

Some brands are going to very easily be able to enter the Virtual World; Disney for example, the MMO game practically builds itself. The question that really should be asked is what are the risks to the brand? While the brand might be able to open a large number of doors (Hasbro's Transformers as an MMO brand anyone?) we shouldn't also forget the Matrix Online experience.

A brand extension into a Virtual World is not an "auto-win" situation, and large companies should be very aware that engaging in any of this sort of activity carries a significant risk factor. Currently we're seeing MMO after MMO being brought out, all aiming for the same kind of market grab as WoW, and game after game is being unsuccessful. Indeed as one commentator recently put it, WoW is the ipod of the internet; just look at the problems the ipods competitors are having!

In your post you outline what "brands should do". I would concur with many of that, but for the most part for me, looking from a purely business point of view, a brand is ultimately about trust. Trust engenders loyalty. Loyalty leads to repeat sales (or renewal of subscription in this case). A person will be buying "Warhammer Online" because the Warhammer brand is pasted on it and maybe they've enjoyed the Dawn of War games, the console games, and maybe the tabletop games and they trust Games Workshop to deliver. Or perhaps it's the Mythic brand which might attract them, and they've played Dark Age of Camelot and think it might be equally as good.

Whatever the case, if that product doesn't meet the high standards set by the brand, the brand itself is at risk. Companies willing to risk their brands by entering into the MMO marketplace therefore should be absolutely sure that the finished product that the customer is going to buy is going to be of the standard their customer associates the brand with.

David Grundy
Senior Lecturer
Newcastle Business School

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Permalink Reply by Phil Guest on May 6, 2008 at 10:26am

Carmen thank you for your feedback and insights.

On your point regarding the level of engagement from the creative industry, I too have experienced this, though I sense a change in the wind.

The creative community may only wish to engage when the clients they serve ask how best to use these communities to spread their marketing message. In my business I am seeing the level of interest from those clients increasing daily and it will only be a matter of time when creative and media agencies will want to learn more, hence the purpose of this debate – I’m with you, let’s be ready for them!

Phil

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Permalink Reply by Phil Guest on May 6, 2008 at 10:38am

David thank you for your contribution.

You raise some interesting thoughts from the perspective of brands creating VWs, my initial post was more about how brands could enter these communities from a marketing perspective i.e. product placement in existing worlds.

With over 250 different VWs and many many MMOs as you suggest, it will be a big ask to succeed in building branded destinations with the level of scale needed to justify the investment.

I can’t help getting a sense that some people have forgotten the lessons from the 'Dot Boom' period and are willing to invest significant amounts cash in the hope of creating a sustainable environment that they control. I remain to be convinced, a ‘build it and they will come’ strategy didn’t work before, why on earth will it work this time with virtual worlds?

Interesting debate, I hope we can attract more to the discussion.

Thanks

Phil

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Permalink Reply by David Grundy on May 6, 2008 at 12:49pm

‘build it and they will come’ strategy didn’t work before, why on earth will it work this time with virtual worlds?

Lately I too have become very, very concerned about this.

I was recently reviewing the slides of a presentation made to Wall Street investors regarding the Fallout MMO currently in production.

The figures and comments made on the slides where somewhat worrying, and certainly the dot.com "land-grab" idea seemed be be fully back in vogue (that said, the slides where presented before the recent downturn, so hopefully investors are examining their investments a little more closely these days)

But yes, the drive for MMO success in the wake of the WoW moneyspinner was always going to be a given. In the next three years over 12 major commercial MMO's are in production and, supposedly (I say, because estimated release times are notoriously wrong), are going to enter the marketplace with combined production costs of over $1bn. It doesn't take a lot of quantitative insight to work out that we're going to see a lot of lame ducks out there. Indeed, expect to be knee deep in them.

This has two combined issues.

From the product placement issue you're examining, the question arises of which horse to back. Especially given that any sensible marketeer should be very aware of the brand risk attached to advertising your product in a "failed" virtual world. Certainly you can expect a bit of bad press at the very least.

From the Brand extension into MMO's point of view, it could be damaging, and, depending on how you've entered into the deal, potentially very costly with production costs of over $80 for the "average" attempt at a "hit" computer game these days.

Let is hope that common sense prevails (a vague and, given the historical context, a rather desperate hope too) and people, in the economically difficult times, start to realise that extending your brand into commercial MMO's (either though product placement or full extension into a game itself) has risks attached.

As with all potential investments good solid research, reliable market data and a strongly cynical attitude are normally the best weapons.


David

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Permalink Reply by Pooky Amsterdam on May 11, 2008 at 11:43am

In terms of product placement, think on this. Let's say, you play a game in a VW called "Bowling for Budweisers" where you have to knock over the bottles of Bud. The game is fun, there is a leader board and you win prizes, maybe widgets for your homepage, or a special asset with a rare tradeable value.

Even if you have been a Heineken drinker all your life, at some point you will pick up a Budweiser because this brand is offering you satisfaction on a visceral level you don't have with the Heineken.

I also agree with the sheep mentality of the advertising world at large, and of course it is the ability to think ahead which wins hearts, minds and contracts. Now a lot of attention is in this space, but until there are people who have had real experience in these worlds on board - and paid for this knowledge too, expect limited results.

That said, it is also hard to sit on more than one throne at a time. With all the VW in place, the time limitations for a person that exist mean they can only effectively achieve a reward in a VW when they put some time into it. VW are great because of the human relationships we form therein, as well as the games we play there. How many VW can ONE individual establish themselves in?

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Permalink Reply by Phil Guest on June 4, 2008 at 8:39am

Pooky thanks for your thoughts. Do you have any examples of what you consider are good or even bad examples of how brands integrate with VW?

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Permalink Reply by ExitReality on June 10, 2008 at 3:37pm

We (Exitreality) recently partnered with Carl's Jr/Hardee's to launch various 3D places and objects within a browser based virtual worlds environment.

To see these brands in 3D simply visit either Carl's Jr or Hardee's and click on the 3D star at the top right of each page.

Alternatively... you can visit these directly through either Carl's Jr 3D Experience or Hardee's 3D Experience.

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Permalink Reply by Barry Everett on August 17, 2008 at 3:49pm

Always the 'crux of the biscuit' - these issues are central to much of our discussions in the Knowledge Networking group, here, in SL, and LinkedIn. What is it about an organization that makes it recognize the potential of a 'new' branding opportunity, like AMC did with Mad Men? Quite ironic, such an epiphany of forward thinking with a product about forward thinking from 40 years ago. I was was a minor mad man later in '72, but thankfully came to my senses. Can you say... mmmm...Budweiser. ;-)

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