Just my humble $0.02 worth… Head Straight to Point 3 for the juice…

Social Virtual Reality has got marketing professional’s hot under the collar.  It is the functional combination of traditional social networking and virtual reality environments.  It will also be the source of frustration and alcoholism for many creative agencies and chief marketing officers in coming years.

 

Ok – time to put some chestnuts in the fire.

POINT A: VR can be a very effective marketing tool (…FOR BRANDED SIMS…)

VR works as a way to engage consumer audiences because the experiences it provides are immersive, novel and memorable.  I have enjoyed many of them myself.  They also earn creative agencies and brands some big kudos.  This point is pretty easy to demonstrate when we look at successfully executed VR campaigns thus far:

  • Hyundai: Virtual Rally
  • Marriott Hotels: Teleporter Beach Simulation
  • Coca-Cola: FIFA World Cup Locker Room experience
  • New York Times: Displaced Campaign
  • Top Shop: Virtual Catwalk
  • Volvo: XC90 Test Drive

If you had a typology of VR experiences, these could be classified as ‘branded simulations’.  You may share them on traditional social networks as unique and noteworthy.  But they are not inherently social.

vr-marketing-branded-sims

POINT B: Social Virtual Reality is one of the most exciting VR applications (…FOR USERS…)

My second point is also pretty easy to demonstrate – it is practically self evident.  Most VR enthusiasts would agree that if done correctly, social VR is a game-changer.  Social and technology commentators would have to concede that this thing is a 900 pound gorilla that is difficult to shoe-horn into any existing conceptual frameworks.

Facebook is the gold standard in ‘social’ today.  FB invested $2b in their acquisition of Oculus Rift.  FB is also an advertising platform – earning $2.38b in Q3, 2016 by slipping ads into your news feeds and side bars.  The scene is pretty fragmented, with many SVR platforms, including:

  • Jaunt VR ($65m from Disney)
  • Altspace VR (Tencent & other commercial backers)
  • Sansar (Linden Labs offering)
  • High Fidelity
  • vTime

Companies are going to try and cash in on VR’s most revolutionary application.  But here’s the rub.

POINT C: Marketing in Social Virtual Reality will not work well (excluding basic product placement)

SVR may seem like uncharted territory, but we have a great case study available.  10 years ago, firms rushed into Second Life – a social virtual world billed as the cyberian frontier.  Branded spaces and digital real-estate were going hot.  But these early corporate adopters rushed out of Second Life just as quickly, leaving a wake of 3d rendered detritus…

The 2006 hype was pretty similar to what we see in 2016.  The list of casualties was pretty impressive.  From the A’s, B’s and C’s only –

  • Adidas
  • American Apparel
  • Autodesk
  • BBC Film Network
  • Ben & Jerry’s
  • Brazil Telecom
  • British Telecommunications
  • Circuit City
  • Cisco
  • CNN

The firms that pulled the plug on their social virtual world’s experience were often embarrassed by the failure and reluctant to discuss their reasons for leaving Second Life.  But we can make some pretty educated guesses.  They left for the same reasons that Brands will be disappointed by Social VR (as a marketing tool) in 2017 – 2019.

REASON #1:  The market is too small to warrant much effort.  Having a presence in Second Life required dedicated staff in the virtual shop front, dedicated IT professionals, new policies, new funding from precious budgets.  It just wasn’t worth it to reach a fraction of the 38,000 concurrent average users in 2008.  Statista published the following estimated sales breakdown of VR units in 2016.  We are looking at 12.2 million units worldwide.  Nothing to sneeze at – but how many people will be active in social VR and how many of those users will be online, in the same digital location at the same time?  Only a fraction of people in 2006 used their PC to access Second Life.

vr-unit-sales-2016

REASON #2: A downturn in the IRL (in real life) economy in 2008 forced marketing professionals to rationalize their campaign programs.  Adventurous and innovative campaigns were ditched in favor of ‘bang for the buck’ defensive moves.  In 2017 – consumers are still weak, wages are stagnant, stock prices don’t reflect earnings and technological disruption is on the table.  Whilst not a given, economic conditions could deteriorate.

REASON #3: You could reach the same audience for a fraction of the cost.  If you want to put a branded message or interaction in front of Second Life residents – it was much cheaper to buy a banner on a user forum than to create an entire virtual presence.  Is there a way to reach VR users and enthusiasts outside of their head-mounted displays?  It would be a bit messy – but shouldn’t be a problem.  Reddit’s VR sub has 33,000 subscribers – while Alexa estimates visitors to UploadVR.com and RoadtoVR.com at over 16,000 each per day.

REASON #4: Sadly, Second Life got a reputation as a den of sex, gambling and sweaty basement nerds.  This is pretty shortsighted, but as marketers would tell you – ‘perception is everything’. Brands and public relations experts spend ridiculous sums to carefully create a particular image, associating their product with celebrities, fun-lovers, successful leaders etc.  Many of these brand ambassador may have loved Second Life, but you can’t see them under their digital pink bunny costumes.

second-life-user-profile-lol

“I want to pitch my new technology product to guys like this”, No One. 2016

REASON #5: Firms couldn’t really offer anything to entice Second Life residents into their virtual shop-fronts.  Reading through old forum posts it looks like they tried.  Brands hosted free concerts, gave out free Linden Dollars (in sim currency) to visitors, hosted events etc – but SL residents typically left straight away – having no reason to stay any longer than was absolutely necessary.

REASON #6: Second Life never really intercepted consumers at a critical point in the ‘purchase decision process’.  You want to buy a new car, but are tossing up between Mercedes or BMW.  At no point did you say, “Well I better jump on Second Life to check out the range and book a test drive”.

REASON #7: Legal: Ownership of the digital content and intellectual property was and is a murky area.  Innovation and prudent legal positioning don’t often co-exist.

These challenges were not only shortcoming of Second Life itself.  They are embedded into the medium of virtual worlds.  They have not gone away.  Now, to be fair – many things have improved a decade on.  The cost of digitally recreating IRL goods have decreased dramatically.  But it is still much cheaper to transport physical goods to a trade show or strip mall.  The ability to capture user data has been enhanced.  However, this will be platform dependent and we don’t yet know what metrics will be made available to corporate entities.  The sense of realism and immersion in social virtual reality is also 10x better in 2016.

NOTE: THIS IS NOT A BAD THING!

Socially Virtual Reality begs a certain question… “If you could be anything – what would you become?”.  You can hang out in any space (real or imagined).  You can take on any form!  Free from the limitations of natural laws, you can fly or crush replica’s of London underfoot as Godzilla.  If you could chose to wear anything – would it Armani or a replica of Neil Armstrong’s space suit?  How many people would chose a Toyota Prius for virtual transport over a 12 horse carriage or hot air balloon?  Social VR has the potential to change patterns of consumption entirely.  Does consuming a virtual product in SVR satisfy the need to purchase it in real life?  Much remains unknown 🙂