Second Life Loses Luster

BOSTON Marketers continue to rush to the virtual world of Second Life despite increasing evidence they don’t really know what to do when they get there.

Last week, Coldwell Banker hung out a shingle on the site as “the first national real estate company to sell homes within the community.” The realtor is in good company. H&R Block, Adidas, IBM, Reebok, American Apparel, Toyota, Leo Burnett and Bartle Bogle Hegarty are among the dozens of firms already there.

So far all this collective marketing savvy hasn’t much impressed the actual Second Lifers. More than 70 percent of the site’s users say they are disappointed with the marketing that goes on in Second Life, according to a survey by Komjuniti, a Hamburg, Germany, research firm. This could be because companies are approaching the site like a traditional marketing channel.

“The brand sites on Second Life currently look like they’re being treated in pretty much the same way as [traditional] advertising campaigns,” said Nils Andres, managing director at Komjuniti. They have been “placed with the hope of getting high visitor frequency and good PR scores.”

While some companies have done innovative work, there are a lot of places on SL where companies have put something up and then clearly never returned. Because of this, Second Lifers have become skeptical of marketing on the site. “They expect more creativity, more inspiration, and not vertical influence from the old and traditional way of the 60-second spot,” said Andres. In addition to not liking the marketing they saw, 42 percent of all respondents doubted companies would actually put much follow-up effort into the site.

Linden Labs, the site’s creator, said this survey supports what they’ve been telling companies. “The most successful business people in Second Life have taken a look at the commercial landscape and determined where needs exist,” said Catherine Smith, Linden Labs’ director of marketing. “If you are not authentic and do not offer anything to the community, you are likely to be ignored.”

Their attitude makes sense to Paula Drum, vp, marketing at Block, which opened up shop in Second Life two weeks ago. “The big difference between Second Life and other marketing channels is you can’t go in with a short-term mind-set,” she said.

While Drum couldn’t say what the company’s long term activities on the site will be, so far it is offering free tax advice for two hours a week from now until tax day. Users also can get a preview of the company’s new product called Tango, some virtual scooters to ride around the company’s part of Second Life, Tango-related virtual apparel and a chance to win virtual money by placing Block ads in the user’s part of Second Life.

One of the reasons that marketers may not stick around the site is because the actual number of regular users is far lower than what they had expected. Linden Labs and the media have made much of the site’s 3 million users. However, the number of people who use the site regularly is probably a tenth of that total, according to the tech news service CNet. Linden Labs has not responded to questions on the topic.

Linden Labs’ Smith said that’s not that far off what her company has found. “About 10 percent of registered residents have logged-in in the past week, and about 25 percent have logged-in in the past month,” she said. “We’ve found consistent usership to be in the 15 percent range.”

“Marketers are just following the hype without thinking about the proportion of investments and alternatives in the market,” said Andres. He said Second Life’s numbers pale when compared to those of something like the online game World of Warcraft. “If you compare WoW and Second Life, the ratio and effectiveness of marketing communication is way better in WoW than in SL,” said Andres.

WoW has more than 7.5 million people who pay for subscriptions to the site. While Second Life does have more than 40,000 paid subscribers, most users use free accounts. Instead, Linden Labs makes most of its money from companies that lease space on the site.

So why go there? Drum thinks it’s less about the total number of users than the impression that being there can make. She hopes that the move into Second Life along with the company’s new presence on YouTube will boost Block’s reputation as an innovative company.