Hundreds of ugly billboards have sprouted up overnight, blighting the neighbourhood and blocking the sea views, and shops that opened with such fanfare a few years ago are now closed or empty.
This could be anywhere in the world but it is a virtual street in computer-generated online universe Second Life, where people create digital versions of themselves and hang out, buying and selling virtual stuff.
Following Second Life's popularity - in March it boasted 13 million registered "residents" - brands like US retailer Best Buy and computer vendor Dell Computers diverted large chunks of their marketing spend there, hoping to translate online kudos into real-world sales. Alongside virtual shops and islands, billboards went up in droves, and they are now "without question, one of the biggest issues we face," says Jack Linden, head of Second Life creator Linden Labs. Littering the virtual world with so many ads "ruins the view and depresses land values for nearby residents," he says.
Virtually over
Luckily, Linden has the power to simply remove all billboards from large tracts of its digital kingdom. But do such online marketing initiatives really work for real-world brands? Not according to Rebecca Lieb of New York-based digital marketing agency ClickZ. "Brands piled into Second Life like lemmings. It was ridiculous. Even a virtual ad agency launched there, for Pete's sake," she says.
When pioneers like Starwood Hotels and American Apparel set up shop in Second Life two years ago it was perhaps more about getting real-world headlines, she says, rather than reaching out to the residents of Second Life, who are anonymous, immeasurable and increasingly only interested in buying digital genitalia and indulging in cyber-sex.
"There are lots of reasons why Second Life is over as a big brand vehicle for now. First, it's simply not that easy to participate in Second Life; and secondly, there's an enormous discrepancy between its registered users and actual regular visitors," argues Lieb.
While virtual worlds may be going off the radar when it comes to ad-spend, and online banners are finding it increasingly difficult to rise above their status of much-ignored website wallpaper, video games are now where it's at for marketers. With "launch weekends" of games like Grand Theft Auto and Halo now overtaking those for Hollywood blockbusters (Grand Theft Auto 4 made $500m in its opening week of sales compared with the launchweek box office of $406m for Pirates of the Caribbean: At World's End), advertisers are inevitably eyeing this market as a new way to reach all those young eyeballs that have dropped TV and are ignoring banner clutter.
"In-game advertising delivers an elusive young male audience, and offers significant dwell-time that all advertisers crave," says Guy Phillipson, chief executive of the Internet Advertising Bureau.
Hard-to-reach consumers
The global in-game advertising industry was worth £42m in 2006 and is expected to be worth some £526m by 2011, according to analysts Yankee Group - and it has come a long way from trackside billboards in Gran Turismo or perimeter ads around virtual pitches in Fifa 08. Thanks to in-game ad specialists like IGA Worldwide and Double Fusion, digital product placement ensures that brands are now embedded much deeper and more subtly into gameplay. When you drive Lara Croft around in Tomb Raider Legend it is a Jeep you're driving, for instance; players get to chose between Adidas boots in footballgame Power Challenge; and Chrysler cars are driven by characters in the shoot 'em up game, Splinter Cell Double Agent.
However, these examples are all static, in that they need to be built in during the game's production process and cannot be changed or easily measured. But with the evolution of a new generation of gaming platforms, it is about to get much more interesting for advertisers.
"Now that consoles like the Xbox 360 are web-connected, it's easy for advertisers to place ads dynamically," says Mark Rock, co-founder of pioneering satellite-delivered gaming platform Playjam. In other words, advertisers can change their ads after the game is published to coincide with events in the real world, or have them specific to a location.
"Dynamic in-game advertising exploits the power of web 2.0, enabling marketers to place their brands in front of gamers in real time; they can also update them, track them, and measure their effectiveness," explains Phillipson.
However, brands should be careful before entering the game world, he warns: "Respect for the audience is key - interrupt the gaming experience at your peril." Charlie McGee, managing director of virtual ad agency Carat Digital, agrees: "Ads need to be suited to the game environment they're in. Insert an overly commercial, out-of-place message and you'll get burnt in the blogs. Plus, many games involve shooting and killing, and not every brand wants to be associated with that."
Weblinks
Second life: secondlife.com
Internet Advertising Bureau: iabuk.net
