DIY Branding in Virtual Worlds

I’ve posted a new paper about member developed business brands in There and Second Life to SSRN, available for download here.  This is something that grew out of last year’s more general Advertising & Branding in Social Virtual Worlds project, this time focusing on four “DIY” brands developed by members themselves.

We’ve discussed advertising and branding in virtual worlds many times before here on Terra Nova, but this time I want to turn the spotlight away from established corporate advertisers and discuss the entrepreneurial activities of several innovative members instead, for they are fascinating case studies of the ways in which regular folks with no previous advertising industry experience have co-opted the tools of the industry for their own uses.

A few things to keep in mind when thinking about member developed virtual world brands:

- Brand-building is a complex process, requiring the development of a set of values which are communicated to customers through carefully constructed brand elements like brand names, logos, positioning statements, etc.  There are many virtual businesses in There and Second Life, but at this point few well developed brands. 

- None of the four brand creators featured in the paper have any previous experience in the advertising industry, but they do regularly draw on other types of real-life experiences related to both work and leisure pursuits in the development of their brands.

- All four brands were initially created “for fun” – it is only much to their great surprise that these endeavors have now become profitable enterprises. The line between “play” and “work” has become extremely blurred for them as a result.

- Not all virtual worlds enable or encourage the development of member generated business brands. There and Second Life are two of the few that have this type of activity, as they both have in-world economies with economic ties to real-world currency, official support for the creation of member owned businesses, in-world features and tools that enable the creation of branded products, and officially sanctioned ways for members to market and advertise their products and brands.  Virtual worlds that don’t have these things, not surprisingly, are not seeing the development of member brands.

- Branding is all about identity creation.  In this case, each brand’s identity is deeply intertwined with its creator’s personal identity and the identity of its parent world. 

While the legal and economic issues raised by the existence of member generated business brands is not the main focus of my paper, I hope it will serve as a springboard for discussion of these issues here.

Comments

[WorldMaker]

1.

"Not all virtual worlds enable or encourage the development of member generated business brands. There and Second Life are two of the few that have this type of activity, as they both have in-world economies with economic ties to real-world currency, official support for the creation of member owned businesses, in-world features and tools that enable the creation of branded products, and officially sanctioned ways for members to market and advertise their products and brands. Virtual worlds that don’t have these things, not surprisingly, are not seeing the development of member brands."

I have to disagree. I think that this "ad hoc Corporatism" is a facet of nearly any grouping of players in any virtual world, regardless of how well the world facilitates it. Players seem to naturally find ways around restrictions to get their brands across.

Its just that we use so many different names for the same thing. "Guilds" in most of the fantasy-based virtual worlds are exhibiting most of the same characteristics of any other corporate entity (even if most don't deal with RL monies). In some of the games the Guild branding is an insanely important concept (because there is so much competition), and most of the players doing the branding work know little about marketing. The funny thing is that in the games there often isn't much to brand, because the game creators haven't thought about it, but most players can still name some of the biggest player-controlled "brands" (be it Guild, Corporation or Pirate Crew/Flag).

For some virtual worlds these groups of players are an afterthought, and thus their methods for branding and gaining a presence in the virtual world are similarly an afterthought. I think slowly more VW designers are beginning to see that these "Player Corporations" (no matter what the name) are just as much first class citizens as the players themselves. Guild Wars, EVE Online, and Puzzle Pirates each put a lot of stock into player Guilds, Corporations, and Crews/Flags (respectively) that is evident in the fundaments of the design. Each offer unique ways to help their groups get their branding across within the space of the virtual world.

[Betsy Book]

2.

Yes, guilds do engage in similar branding tactics and can become well known "brands" within their parent worlds. However, this paper is specifically about business brands in virtual worlds. Brands created specifically around entrepreneurial activity, that generate real profit for their owners.

[ren reynolds]

3.

Interesting record of what’s going on at the moment.

I particularly like Amee’s ‘mascot’ (fig 14, p 14). A cartoon version of her Avi. I’m currently grinding though Baudrillard's Simulation and Simulacra, so I guess a cartoon version of a digital ‘original’ pricks my fancy.

Actually if you want more Aimee’s than you can shake a stick at, check this out: secondlife.blogs.com/photos/nwn/fic_chamber_set3.jpg

Sticking on the Aimee theme I think that it’s interesting that way that she is liking with SL related external ‘media’. She is referenced a lot on SL’s official blog New World Notes, such as this story on *PREEN* http://secondlife.blogs.com/nwn/2004/10/the_sassily_str.html.

And is now a writer on the very not official Second Life Herald: www.dragonscoveherald.com/blog/index.php?p=746#more-746, this is almost like corporate bogging.

Back to NWN, I think that Hamlet’s attempts at self promotion are interesting in a related way: secondlife.blogs.com/nwn/2005/05/advertisements_.html.

[bruce boston]

4.

Hi Betsy,

Very impressive paper, I'll not only be referring to this in the future, but am planning to walk it around the office a few times this week.

One key take away for me is just how much unlocked talent there still may be in these communities. Clearly, given the opportunity we have seen all kinds of businesses, groups, and entrepreneurial activities. Also, I think we are still at the leading edge, and the breadth of companies and services is yet to come. That said, I still go back to surveys that have been discussed here before that suggest that only a small percentage of people in the market are looking for 'economic'/'entrepreneurial' experiences. (I guess I should note that this number could be skewed due to our audience, just not sure which way it's skewed)

I also think this is ‘the paper’ to start with for anyone thinking of starting a branded virtual company of their own. Clearly there are some specific principles that are being used here, and that work.

Another question that may be good to ask here is why no cross-over in brands? In the media and often here in TerraNova, SL and There.com are put in the same bucket. But this paper seems to suggest that there is little brand cross over, and thus that seems to suggest little market cross over. The member brands that sell seem to do so because they mimic the corporate brand of the community that they are in, which begs the question, have worlds like SL and There.com boxed themselves into sub-markets so small that brands are not able to crossover?

In There we have seen major RL brands come in to There.com, and member brands go from There.com to IMVU, but I'm not sure if we have seen any major brands go into or out of Secondlife except brands that are already going after the niche market that they represent. Which begs the question, does the use of branding limit the potential markets for these 'open-end' worlds? And how open-ended are they if there is so little crossover? And, maybe a follow-up question, what do you think are the main needs that these worlds are addressing? Are there other needs that they could be addressing? And, ultimately, do you think the market is looking for a 'producer (anyone can make money here)' experience or a 'consumer (anyone can be entertained here) experience'?

Any thoughts would be very welcome, and again, big '''TU to Betsy for this paper, it's much appreciated!

-bruce

[John Hiler]

5.

I second Bruce's big Thank You to Betsy for this paper!

I absolutely love the *PREEN* brand mentioned in this article. I don't know if Aimee is reading this, but if you are: please get yourself a RL trademark on your brand! It is really a great brand... the asterisks and all-caps are so evocative of online MOG's, it makes me feel like I am online as I type this!

Oh wait, I *am* online as I type this... nvm.

[greglas]

6.

Wow, Betsy -- this is great stuff. Printing it out now, but will be considering the implications for a while. :-)

[Erillion]

7.

I want to also mention Star Wars Galaxies and its completely player driven economy. It has master merchants, factory supported mass production, shopping malls, advertising droids etc.

It is very common that players have generated brand names that dominate the market in quality, quantity and (low) prices ... especially in the area of weapons, armor and medical products. Some people have invested on average 4 hours per day to essentially run a full blown business empire in a virtual world, which includes resource gathering (of only the highest quality resources), mass production, distribution via huge shopping malls and marketing their brand name via events and competitions. And it works !

Strangely enough some people had put so much work in it that they could have gotten rich if they had applied the same dedication to a real life business venture. But it seems they do it more for fame than fortune.

It also has been mentioned that quite a few of the players have suffered "burn-out syndrome" from trying (and succeeding) to run a successful business empire in a MMORPG.

Have fun

Erillion

[Betsy Book]

8.

does the use of branding limit the potential markets for these 'open-end' worlds? And how open-ended are they if there is so little crossover?

The use of branding only limits potential markets in that it identifies “target” markets for specific types of products or service. Which imo is a smart, efficient thing to do from a business perspective. I think there is much greater potential for fashion brands to crossover and cater to similar subcultures across several virtual worlds than something like, say Cubey’s airplanes, which would be difficult to recreate in a world like There. I suppose Cubey could put a sort of Casablanca, tropical Fantasy Island twist on the vehicle brand for There, but in the end that’s more a new brand than brand extension. It’s funny, I actually did see a “piggy bike” like KittenKat’s in Second Life, but not sure if that’s really an indication that SL would be open to KittenKat’s super-cute brand (I have my doubts there) or whether it just means a piggy bike meme is now propagating through multiple worlds .

And, maybe a follow-up question, what do you think are the main needs that these worlds are addressing? Are there other needs that they could be addressing?

Clearly these worlds are serving as major outlets for various types of identity expression, through the creation of online avatar identities, guild or social group affiliations (which often relate specifically to facets of RL identity), and now taking more of an entrepreneurial bent with the creation of brand identities. Right now there’s a small town community focus because of the small size of these worlds but I bet over time as the populations grow the worlds could be used more as mass media outlets. It’s way way early for that yet – have to have masses before you have mass media, but the potential is certainly there.

And, ultimately, do you think the market is looking for a 'producer (anyone can make money here)' experience or a 'consumer (anyone can be entertained here) experience'?

Ultimately both. One of the great things about virtual worlds is that they allow participants to take a more active role as producers, not just consumers. I think that’s what I find so exciting about these DIY brands.

[Betsy Book]

9.

Erillion, thanks for bringing up SWG, as I think there may be some interesting cases for member generated brands there as well. Question though - to what extent can SWG members create truly original works for the SWG world, ie. how much creative freedom do they have in the production of SWG artifacts? It does sound like SWG members are using their experience with the world to learn business skills, leadership skills, etc.

[Jinx_tv]

10.

I think the main reason you don't see a lot of crossover between worlds is that a brand is usually just one person, and it is a lot of work to get to know a world and its developer program and it is a lot of work to create a brand for just one world. I have tried Second Life, but found the idea of starting from scratch again to be a bit daunting. There --> IMVU is a bit easier because you are using the same tools. In some ways, the IMVU developer program is like a more advanced version of the There program, you get more polys, a bigger texture budget, the ability to make things you can't make in There (hair, eyes, and shoes for example) and it seems like a natural progression, when you want to stretch your 3D wings and grow a bit from what you can do in There.

But heck, even with the similarities it is almost impossible to find time for both of them. Maybe if a brand were more than one person, but it is very hard to find like-minded people that you mesh with and that match your own artistic abilities and levels well, and that take it as a serious business and not just their hobby-du-jour. Many of the most talented developers simply have no interest in working with anyone else...what they do is a form of art and a way of taking something that is inside their head and sharing it with other people. That sort of thing does not lend itself well to collaboration, and the very fact that it is a form of art means that it is less likely to be duplicated across worlds. Once you aren't creating the original item but simply making a copy to be used somewhere else, it just isn't the same sort of creative process any more.

[Erillion]

11.

Betsy,

Although SWG crafters are limited to the items that can be produced in game (which means basically any qualified master crafter could recreate it) in reality you see brand-name products with fairly unique qualities (as the crafter uses only the best resources, collected over years). However, its NOT like in the old MUDs were at very high level you could produce your own item for all to buy or your own little area that you yourself created and that everyone then can visit.

One interesting aspect has been the appearance of huge shopping malls where tens of thousands of items are offered by up to 100 crafters. Often prices for products in such malls are higher than in other places .. some of them only a short walking distance away. But players ARE willing to pay more if they find all things in one place. Walmart has often been mentioned as comparison. Players are essentially trading money for time safed. Sometimes paying INSANE amounts when you compare it to the same item you can get elsewhere (and ever since they introduced a galactic vendor search you CAN buy the cheaper item from afar ... and players STILL go into the shopping mall and pay more).

Also the shopping mall environment leads to players buying more than intended, as they found other things they need just by browsing other vendors while they visit the mall.

Ever since the introduction of multiplayer ground vehicles mall managers even offer free taxi service from starports to the shopping malls. This taxi service is also advertised by billboard droids spamming the major cities with ads for the shopping malls. Alternatively managers use NPC actors telling everyone nearby the way to the mall (inlcuding coordinates).

So I see MANY parallels to real life in this game. If you want more info mail me at [email protected] or ask questions here http://www.impslave.com/forum2/

Have fun

Erillion

[Erillion]

12.

addendum :

as SWG in game money can mean real cash (e.g. on e-bay) someone that can run a successful in-game business empire can theoretically turn this into a kind of RL job without having to resort to farming or cheating.

I know from my vendor sale mails that I have earned some 400 million credits since summer 2003 and gave away at least as much in items for free (as an architect and shipwright). And I know for a fact that there are in game merchants (usually weaponsmiths) that have earned significantly more than me (by an order of magnitude at least).

So an in game brand name can increase RL profit if someone really puts effort into it.

Have fun

Erillion

[Fizik Baskerville]

13.

Betsy and I touched on this in real life a few weeks ago.

Having read Betsy's excellent article, coupled with the excellent debate it has created. I would like to make the following observations:

1) A 'real' brand can only be called a Brand when it has achieved recoginition of the following parameters: depth and implementation of an ideal/proposition or value system that not only works at product level, but also is implementable into the organisation's behaviour and/or communication.

2) Time... you have to earn the right to call anything a 'brand'. At best the designs in question are 'great and fun designs' or 'innovative designers'.

3) I feel Betsy is really talking about people creating 'virtual businesses' rather than developing a core brand or design; think 'ebay trader' rather than 'brand' business. At the end of the day, even though people in SL own their own IP rights, Linden Lab still have the rights to 'communicate or market that product or service in relation to their own Brand'. If thats the case, these brands are actually sub-brands to There and Second Lifes own brand values and market communication.

Also, and an important point. I can see one of the brands is actually 'passing off' someone elses brand under their name.

4) As for the design element, a real Brand is something that can be executed across all and every medium with instant recognition to that companies service or product. They are though fun design ideas that work within the context of the virtual worlds market; would it be easier to categorize these under the term 'boutique' or 'niche' or 'artisans' or just 'virtual designers'?

I do though think it does open up the discussion and will hopefully help us define an exciting new channel.

From a recent discussion this is my prediction for the next 18 months:

1) An RL brand really takes an active role in developing a Virtual World brand that is more than just a campaign or one-off idea.

2) Policing the Content - A RL company will take legal action against IP theft within a Virtual World (currently the IP rights are based on the individual, therefore the individual is responsible for what they create/steal). This will force online-communities to self-govern and police the content of traders and designers.

3) The IRS will investigate and demand back logs of trading and fine a 'virtual trader' for not declaring income

4) The European Union will notice the amount of revenue being generated and impose a VAT upon 'virtual world' activity.

[Betsy Book]

14.

Fiz, was hoping you'd jump in here :) While I'm obviously more willing to grant the term "brand" to some of these virtual world businesses than you are I think we agree on their symbiotic nature with the parent brands. This close relationship to the parent brand is a reason for their success but could also be the thing that holds them back from ultimately growing beyond their current relatively small domains into what you would call a "real" brand. It's ironic, isn't it.

Erillion, thanks for the SWG info. Absolutely fascinating stuff. Although I must admit the thought of a "billboard droid" gives me pause!