Brands To Virtual Worlds: Show Me The [Real] Money
Posted by anastasia on 02-19-2009
This week I went "on the road" to meet with some different companies in the Bay Area that we hope will get involved with our Ypulse Youth Marketing Mashup in June. One of the companies sells advertising (among other things) for lots of youth oriented sites including virtual worlds. Another company offers portable avatars where you can surf the web with your avatar buddies picking up virtual goods along the way.
I'm no expert in virtual worlds, but what these youth-y virtual worlds (and according to today's Research Roundup, there are 200+ now) all love to say is that kids and teens are demanding brands in world. And I believe it — who wouldn't want virtual Nikes or Adidas vs. virtual generic sneakers? I get the demand for personalization and how much brands have become a part of their online identities (as well as off).
The bigger question for all of these worlds who are excited about tweens/teens demand for brands is whether brands will pay real money to play in these worlds. These are tough economic times, there are many virtual worlds to choose from, and I'm sure Joe Brand Manager is thinking, how can I measure whether teens demanding brands in virtual worlds translates to teens buying these brands in the real world? Does drinking virtual Pepsi or driving virtual Scions lead to actually buying more Pepsi or choosing a Scion over another car? Even if the integration is completely contextual, cool, fun, offers value, etc., does it translate to helping these brands' bottom line? This is the multi-million dollar question all of these worlds (and their investors) want answered and will determine whether these brands will keep spending in-world during this economic downturn [I think they will but only in a select few with huge numbers]. Still, the sheer number of new worlds and the desire for brands in them means brand will probably start demanding to pay less to play in this space as well (until those bottom line results are incontrovertible).
You could also argue that youth are demanding brands they already own/like or aspirational brands they can only afford in-world so having the virtual stuff doesn't move them to buy more. But that ignores the social aspect of seeing other avatars in cool brands you haven't heard of or didn't pay attention to.
Some of these worlds, especially those for younger users, offer a subscription-based model to keep these worlds brand-free. For them it will be a fight for parents who are also watching their pennies.
I'm curious to know what Ypulse readers think will happen in the youth virtual worlds space? In the real world, brands equal social status — delineating the haves from the have nots. At least in virtual worlds, any avatar can rack up enough points to "buy" higher-end brands. Do these worlds give some kids a way to be the cool/rich avatar without having real world money or just encourage more of that kind of behavior offline? Do you see the presence of brands in these worlds as benign or troubling?
Categorized under: Web
February 19th, 2009 at 4:46 pm
As a founder of Meez, and now a consultant at Loki Partners helping sites monetize through virtual goods, I work with brands extensively in virtual worlds. There is no question that some brands are pulling back on some of their experimental ad budgets, including virtual worlds.
What doesn't change is that the usage of virtual worlds is continuing upwards, and if the brands want to reach these millions of users, then they'll have to work with the virtual communities to establish success metrics, whether it's brand exposure ones, or actual click metrics. What's great about this medium is that it's graphical, animated and multimedia, meaning it gives key youth brands a wide range of ways to portray their brand attributes vs just a text link in google, so I believe that this medium will become an important part of the a brand's marketing budget. The users themselves are all demanding both everyday and aspirational brands to match their personalities, so it's a good fit for the advertiser.