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Virtual Worlds Let Advertisers Mingle

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Over the weekend, BBC Radio 1 kicked off the U.K. festival season with "The Big Weekend" in Dundee, Scotland, featuring acts like Pink, Snow Patrol and Mylo. But not all fans who caught the show did so in the real world. Instead, the BBC simulcast the concert on an island it created in Second Life, an online virtual world, where fans could listen to the music, mingle, dance, even dive down a mudslide—all with no lines for the bathroom.

Virtual worlds are a hybrid of video games, social networks and instant messaging where users create body doubles, or "avatars," that can hang out, meet new friends and explore a graphics-heavy digital environment. "Now you can have a virtual experience that is just as intense as a real one," said Chris Sheehy, strategic director of in-culture marketing at Brain Reserve, a New York marketing consulting firm.

Advertisers are starting to explore so-called "metaverses" like Second Life as an outlet for experiential marketing, giving consumers the opportunity to interact with brands on their own terms.

In Second Life, San Francisco-based Linden Lab has created a platform for a massive virtual digital environment, entirely user- created. Linden Lab supplies the tools, but its users customize their avatars and create the landscapes, buildings and a full-blown society inside the parallel universe. Second Life has even developed a working economy, including property rights, a currency system (Linden dollars) and a monetary exchange (the LindeX) for conversion into real U.S. dollars. In three years, Second Life has grown its user base to over 200,000. Its members exchange the equivalent of $5 million per month, buying land, clothing and services.

Several agency executives say they have proposals to clients for integrations in Second Life, and virtual environments were a hot topic in the corridors of last week's E3 gaming conference in Los Angeles. "It's not about advertising or billboards. It's about giving people props to add value to their social networking in a virtual world," said Justin Bovington, CEO of London-based shop Rivers Run Red, which created the BBC festival and has promoted Disney films The Chronicles of Narnia and The Hitchhiker's Guide to the Galaxy in Second Life.

David Fleck, vp of marketing for Linden Lab, said brands are welcome to establish themselves in Second Life, where they would enhance the realism of the environment. He sees no reason why Starbucks should not set up virtual outposts or Hummer couldn't give test drives. "It's such a compelling opportunity for these guys to get into communities," he said.

Yet so far, only a few advertisers have established beachheads in Second Life, which Fleck chalks up to its free-form environment that allows users to create anything and set their own rules. Wells Fargo dipped its toes in the water nine months ago when San Francisco independent shop Swivel Media used the Linden Lab platform to build Stagecoach Island, a fantasyland where users can go hang-gliding, snowboarding and jet-skiing. The catch: Some Stagecoach Island activities cost virtual money, which users can acquire by taking a Wells Fargo financial-management quiz.

The island is 99 percent play and 1 percent education, admits Swivel Media founder and creative director Erik Hauser, but it has helped Wells Fargo connect with a distracted younger demographic. On average, visitors to Stagecoach Island spent more than an hour, and 87 percent visited the virtual learning center to earn credits. One visitor even held his birthday party in the island's dance club. "Virtual environments are probably the perfect tool for learning," Hauser said. "They create a more visceral experience than trying to do it in a two-dimensional way."

There are signs that this kind of deep immersion can resonate beyond the typical lightsaber crowd. Second Life attracts a diverse audience, about 43 percent of which is female, with an average age of about 32, according to Fleck, and the average user spends a whopping 30 to 35 hours a month in Second Life.

Interscope Records hopes to make virtual worlds even more mainstream. This week, it is officially opening The Pussycat Dolls Music Lounge, a virtual nightclub created by San Francisco startup Doppelganger (formerly called Evil Twin) to appeal to the PCD's teen fan base. The Lounge, designed by actual architects, features a dance floor, hot tub area, myriad rooms and a VIP lounge where the avatar Pussycat Dolls play.

User avatars, with customized outfits and looks, can stroll the club, visit the PCD store and listen to music by Interscope artists. Doppelganger has hooked up with AOL to use its IM platform and promote the virtual club. Both Interscope and Doppelganger are in discussions with other advertisers to integrate into The Lounge. Doppelganger is beginning what it calls a "design partnership program" to help advertisers immerse their brands in the lounge. Already, one beta tester has requested that brands like Nike and Levi's be available for avatars. "It's a careful balancing act we're attempting," said Andrew Littlefield, CEO of Doppelganger.

Similarly, Adidas is using a synthetic environment in its World Cup push. This week, it plans to launch its own branded virtual world for the World Cup through Typhoon Games. Called Impossible Team Online, it lets players select their outfits and interact and compete with each other. Though primarily focused on Asia, where gaming is more dominant, Adidas sees the virtual environment trend spreading among its 15- to 25-year-old primary target market. "The challenge here is, if they're interacting in less traditional ways, we have to evolve the ways we engage with consumers," said Sabrina Cheung, an Adidas rep.

For now, new-marketing consultant Joseph Jaffe, whose Second Life avatar goes by the name Divo Dapto, believes marketers should do more observing than advertising in virtual worlds to see how people behave. "Sometimes, discretion is the better part of valor," he said.