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Marketers Second-Guessing Second Life

| 16 Jul 2007 16:00
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Four years in, some marketers are second-guessing their commitment to Second Life in the face of limited exposure and outright hostility from some of the virtual world's users.

Aloft, part of Starwood Hotels and Resorts Worldwide, is closing up shop in Second Life and donating its virtual land to TakingITGlobal, a non-profit social networking group. Aloft Vice President Brian McGuinness summed up his company's reason for leaving by saying simply, "There's not a compelling reason to stay."

While Aloft did initially attract Second Life users who provided valuable feedback and ideas for its real-world hotels, once that initiative was over the company found it difficult to continue bringing people to its "virtual hotel." Other companies are experiencing similar difficulties; according to a report by the Los Angeles Times, territories owned by Best Buy's Geek Squad, Sun Microsystems and Dell were deserted.

A main difficulty for advertisers is the fantasyland nature of Second Life, with no need for food, clothing or other mundane staples of real life. According to Ian Schafer of the online marketing firm Deep Focus, the interests of many Second Life users run toward the risque; during a recent tour of Second Life, he found the Aloft virtual hotel empty, but found casinos, brothels and strip clubs packed. According to his research, "One of the most frequently purchased items in Second Life is genitalia," he said.

A second concern is simple lack of exposure for advertisers. While Second Life advertises 8 million total residents, that number includes one-time sign-ins and multiple avatars for single users. According to analyst Brian Haven of Forrester Research, Second Life sees only about 30,000 to 40,000 users logged on even at peak times. "You're talking about a much smaller audience than advertisers are used to reaching," he said.

Some of those users are actively discouraging the presence of "old world meat-space corporations" in Second Life, with efforts ranging from angry blog entries to a nuclear bomb attack against Reebok and the shooting of customers outside the American Apparel store.

Second Life itself may be feeling the pinch as well. Its active avatar population dropped by 2.5% between May and June, and the volume of real money exchanged in the virtual world fell from $7.3 million in March to $6.8 million in June.

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