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  Harvard Business Review On ‘Avatar-Based Marketing’  
 
 
Posted 2006-05-30 by Tony Walsh
 
 
     
 
Harvard Business Review's Senior Editor Paul Hemp tipped me off to his latest article "Avatar-Based Marketing," running in the publication's June issue. He's interested in feedback on the article, so feel free to add your comments to the end of this post.

The extensive article is detailed but easy to digest, leading readers new to virtual worlds (specifically, Second Life) through the basics and nuances of avatars, covering some of their current and potential relationships with marketing efforts. What most impresses me is the degree of research Hemp's apparently done, and the fact that he covers the potential for avatar-marketing failures. It has been a near-constant complaint of mine that the media--business media in particular--often bungle reports on virtual worlds. Hemp's latest article demonstrates that he's done his homework (similar to the research done for his earlier HBR piece on this subject), and is peppered with supporting quotes, including a brief mention of "advertar," a word I coined to describe avatars used as autonomous or user-controlled marketing vehicles.

I have a couple of minor points to address, although I might not have bothered mentioning them publicly if not invited to by the author.

Hemp writes "In Second Life, you live in a new body and take on the identity of your 'avatar'--that is, a being you've created as a representation of yourself in this online environment." I'm not sure there's a simple way to describe identity as it relates to avatars, but in my opinion, identity can go both ways. I don't adopt the identity of my main avatar (the one I designed to look like my real-life appearance) any more than I adopt the identity of my IRC chatroom alias. I act through my main avatar as if I would in real life. However, were I to wear my zombie avatar, I might adopt the identity of the zombie for amusement purposes. Or, I might not. Hemp discusses how one's choice of avatar could be an indicator of the user's personal preferences, and I think this is true. But appearance on its own merits doesn't tell us what a user's motivation is. I think it might be less important to know "what" an avatar is, compared to "why" a user has chosen that avatar, and there's no easy way to detect this (thankfully).

Hemp writes that "marketers [in Second Life] have the opportunity to interact with engaged minds." This is strictly true, but I think it's worth pointing out that one's willingness to interact does not always indicate engagement. I think Second Life has engagement potential, but doesn't offer the instant engagement offered by most massively-multiplayer games (Second Life is not a game in my view), and even simpler, more controlled virtual worlds like Habbo Hotel. The best kind of engagement is with other avatars, and the more I consider it, the more I think word-of-mouth marketing is the most effective way to reach residents of Second Life (aside from plastering the client software with built-in ads).

That's all from me for now. Feel free to add your thoughts below...
 
     
 
   
 
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  7 Comments  
 
   
 
Comment posted by Secureplay
May 31, 2006 @ 8:23 am
     
 
I must say I was disappointed in the article. It does provide a reasonable survey of what has been done but... so what?

First, there should be some REAL WORLD data available on the Disney promotion and some of the others that have occurred... and why didn't I see the infamous Everquest PizzHut promotion mentioned. Also, you've noted that the Wells Fargo service was dropped and had problems. You have noted issues and limitations with Massive before.

Mainly, I didn't see much analysis, just anecdote. At least put some schema in place to structure thinking about this area. From both where things are at and where they are going and... does it matter?

What about the audience size vs. cost of marketing? What is the revenue opportunity?

What are the international implications of this are as many virtual worlds are increasingly global?

Finally, the article continues to perpetuate the foolish distinction between real and virtual worlds. For business and marketing its all about the real money.
 
     
 
     
   
 
Comment posted by Tony Walsh
May 31, 2006 @ 8:54 am
     
 
Steve, you raise some great points. In reading and re-reading your comments, I'm struck by why I didn't bring up these issues myself, and I think it might come down to expectations or area of interest. When I read the opening paragraphs of Hemp's article, my expectation was (rightly or wrongly) that this would be a general examination of the issues. As I read further, some specific examples were cited (but not all, as you point out), but overall, (again, as you point out), the article was fairly anecdotal in nature. I'm finding it difficult to articulate why I don't have a problem with the lack of detailed, hard facts. Too much information for the audience to digest at once, maybe? The Wells Fargo and Massive mentions didn't bother me, either--probably because it seemed like it would have been a tangent to explain how Wells Fargo's first VW effort failed, or explain Massive's screw-ups (although mentioning Microsoft bought the company might have been prudent).

I do think that Hemp did a good job of discussing avatars and some other VW elements, which perhaps in my mind is more important to get right than providing rigorous analysis or data points. If it seemed like Hemp was trying to do a hard analysis / data-driven article, I probably wouldn't have liked this one.

On real vs. virtual world distinctions, I'm not sure the business community is quite ready to have its collective mind blown by saying there is no distinction :) In my opinion, there are many distinctions to be made, even if real money flows over the borders and real experiences take place in both spaces.
 
     
 
     
   
 
Comment posted by Secureplay
May 31, 2006 @ 9:10 am
     
 
Tony, I used to have higher expectations of the HBR. Even if this was an introduction, it should give some sort of framework for business dudes to work with. Also, to my mind, it should be critically important to have some information on the market size and impact.

This may be the only chance that Avatars & Virtual Worlds has with this audience - you should want the best case forward.

I think it is critical to cite both successes and failures WITH NUMBERS! Again, if you want business to take this stuff seriously, give them a reason. By the way, there should have been some info on total populations, in-game/world transactions or transaction growth, etc.

And lets not even get into the fact that one-third of SL's business is in adult content, I am not sure how much is in "real estate" speculation... leaving how much for what most would consider mainstream business?

How many articles do you think HBR or other serious business publications are going to do on virtual worlds, online games, avatars, etc.? Would you want their audience's sole picture of the area where you spend your days working to be this article?
 
     
 
     
   
 
Comment posted by hempman richard
June 1, 2006 @ 11:21 am
     
 
Secureplay,

Some great comments, particularly the observation about data. Although most available figures seem to be wild estimates, at best, it would have been worthwhile to include a few more numbers, in order to give at least an order of magnitude sense of the opportunity. You must be a loyal reader of HBR to note the lack of an organizing framework! My response: Trying to offer one this early in the game would be foolish and misleading. I was sorry about not being able to reference Microsoft's acquisition of Massive in the piece; you wouldn't believe our lead time! Anyway, thanks for your thoughtful comments. They'll help inform my thinking as I continue to pursue this subject.

Paul Hemp
 
     
 
     
   
 
Comment posted by hempman richard
June 1, 2006 @ 11:27 am
     
 
Tony, I thought your comment on the different kinds of relationship people have with their avatars ("I'm not sure there's a simple way to describe identity as it relates to avatars") and the relevant question ("'what' an avatar is, compared to "why" a user has chosen that avatar") add an important layer to the general argument. Thanks. Now, tell me, because I'm dying to know: Do zombies prefer Dial or Irish Spring deoderant soap? Is that choice different from Tony Walsh's?!!! Paul
 
     
 
     
   
 
Comment posted by Secureplay
June 1, 2006 @ 11:47 am
     
 
Paul -

I certainly agree about the hype factor with numbers, but the advantage that HBR has over say... me, is that if you went to Disney or PizzaHut there MIGHT be a chance to get some nearly plausible information out of them.

I would think some sort of typology would be possible. Certainly the marketing of the worlds themselves, brand building in a virtual world, as well as marketing real items as opposed to virtual items could be formally broken out. Also, what does it cost? How much to get my real widget in a virtual world? How many "eyeballs"? Many of these virtual worlds or avatar environments, even on a really good day are really small.

The Massive case is notable for where it may make sense, as in a contemporary real-world game, vs. where it doesn't... like a sci-fi game... I think Anarchy Online has a deal of this sort.

Also, the less "pure" virtual worlds, like Habbo Hotel (see Trackback) and maybe IMVU, seem to be more popular - I think Disney licensed Habbo for its online world system... I don't know if there are other companies that sell such a product/service - or how much they cost.
 
     
 
     
   
 
Comment posted by eric kintz
September 16, 2006 @ 1:18 am
     
 
Great post, I especially agree with the comment re- identities. I actually call this new form of marketing "dissociative identity marketing" and you might enjoy the post I wrote on the topic

http://h20325.www2.hp.com/blogs/kintz/archive/2006/09/10/1581.html

Eric
 
     
 
     
   
 
 
     
 
     
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