Make believe makes money

Market research has moved into a fantasy world. Brian Tarran investigates

Last month, Anshe Chung achieved what many would have thought impossible: she became the first dollar millionaire from buying, developing, renting and reselling real estate that doesn't exist – at least not in the conventional sense of the word.

But then neither does Chung, who like more than 1.8m others, is a resident of Second Life, the 3D online virtual world. Her fortune comes from owning 36 square kilometres of virtual land, several virtual shopping malls, virtual store chains, and several virtual brands. She may not really exist, but the money she has made for creator Ailin Graef certainly does.

What Chung and Graef have proved is that there is real money to be made in Second Life. Top brands like Adidas, Dell and Toyota have established a presence in the world, and there are many more following suit. Among those companies already there are two research agencies – Market Truths and Reperes – to help turn virtual people into profit.


Virtual research
For now, many of the big corporations are content to just dip their toes in the virtual water – to be seen to be there. Most of the products bought and sold in Second Life – from fashion and furniture to guns and vehicles – are created by other residents, and resident-run businesses are thriving. According to statistics compiled by Second Life developer Linden Labs, there were almost 13,800 profitable in-world business owners in November 2006.

Market Truths hopes to put a little more flesh on the bones of these figures with an upcoming series of syndicated reports exploring key market sectors within Second Life.

First under the microscope will be the women's clothing market. The research will involve web-based surveys with those residents who have signed-up to Market Truths' Second Life panel while visiting the agency's in-world office.

Managing director Mary Ellen Gordon says: "We will be looking at the market in terms of what is available and what people want. We will also be stepping back and asking whether clothes bought for avatars [Second Life characters] are the same as those bought in the real world, or whether the user is creating a new image for themselves."

The relationship between a person and their avatar is an issue Gordon is keen to explore, and one that goes to the root of the question: Is Second Life a game, or much more than that? "There are some people who view it as a game," says Gordon, "but there is another group of people who see it as an adjunct to real life. These people will be most interesting to real world companies."

Going on the results of Reperes' first survey of Second Life residents – it too owns an SL panel – the latter group is perhaps most prevalent. "As far as the gaming dimension is concerned, it is of course present but to a lesser degree and rarely the sole reason for existing in Second Life," says Emilie Labidoire, head of Reperes' Project Second Life.

For most of the 137 residents surveyed, Second Life is "a 3D chatroom, where you can roam, explore, make friends," says one respondent; "a great place to escape from the realities of modern day to day life and an opportunity to express yourself in ways that maybe you couldn't in real life," says another.

But what does this mean for real life companies? Those SL residents who say they are looking to escape the realities of modern life may also be looking to avoid the abundance of advertising in the real world, and may not take kindly to corporations encroaching on 'their' community.

Reperes detected in its survey some regret among residents that real life was starting to "contaminate Second Life with its shortcomings" – things like consumerism, capitalism, competition and domination.

So companies have to be seen to be contributing to Second Life beyond simply hawking their wares, says Gordon: for example, creating trainers or cell phones for avatars to use as Adidas and Vodafone are doing; or Sony BMG's Media Island, featuring lounges dedicated to some of the record label's top acts, where fans can stream music tracks and watch videos.

Market Truths and Reperes eventually hope to work with companies, helping them to transfer their brands from real life to Second Life in ways that won't prompt a backlash. But at the same time, both hope to give back to the community they now call home.

"We feel we can play a social role; to act as the voice of residents," says Labidoire, who goes by the name Reperes Link in SL, while Gordon – aka Pebbles Hannya – hopes her sector reports will make "a useful contribution" to the evolution of the Second Life economy.


Second time around
Development is continual in Second Life. Putting the power to create in the hands of its users means there is always something new to explore, to experience, to buy. As a result, the scope for what's possible in SL is limited only by technology, and that too is in a constant state of evolution.

Already it is possible to order books, DVDs and CDs through internet retailer Amazon's Second Life store, although the transaction can only be completed outside SL, through Amazon's homepage. For now at least. Reperes CEO, Francois Abiven says that to some people, SL is "the web of the future". Eventually, he says, "you can imagine people doing their shopping online in Second Life, not on the real web." Gordon shares this vision. "The way I've heard it described is that we are moving from the 2D web to the 3D web," she says.

But that's for the future. For now, there is plenty within Second Life in need of exploring – a new type of consumer who pays real money for virtual things, new virtual businesses being set up to serve them, and real businesses looking to attract new customers by marketing to real people through their virtual selves. For those researchers who relish a challenge, we wish you luck in your Second Life.

January | 2007