Avatar Based Marketing

The June issue of Harvard Business Review has a very interesting article written by Paul Hemp, titled, Avatar Based Marketing.  It talks about ways to market to people who spend a lot of their time in virtual worlds such as Second Life.  I've been fascinated by these games for a long time both as a business and as a way of life.  Some 10M people subscribe to these games, pay $15/mo and many spend more than 40 hours a week in these worlds according to the article.  I knew what a big business the subscription revenues were, but I hadn't thought of the potential for advertising and marketing in these virtual worlds to their virtual inhabitants, who have the ability to spend real money buying virtual product.

The logic is very simple.  Each person in the US gets about $2000/year of advertising spent on them, in the form of promotions, billboards, magazines, TV, yellow pages, direct mail and Internet. Well, if one player spends north of 40 hours a week in these worlds, adjusting for sleep time, thats about 2 days a week.  So for every 5 days you exist in flesh and blood, 2 days you exist as an avatar.  Do the math.  With say 20 million users in the near future, that's about a $11B advertising market waiting to happen.

There is another twist as well.  According to the article, current advertising "has always targeted a powerful alter ego: that hip, attractive, incredibly popular person jus waiting to emerge (with the help of the advertised product) from an all too normal self."  This is very true.  However, in the virtual world, every body looks hip and attractive.  So how do you market to this group and capture this $11B market?  It's going to be intersting to see, stay tuned.

Comments

[zheng]

Avatars in Second Life can start their web startups. In fact, Web 2.0 is pretty hot in the virtual world. There is ajax in SL (the callback function is named as llHTTPRequest :-)

Social networking for avatars? Adsense in virtual web sites? Where is the Sand Hill Road in SL? II-IPO? Wow, the possibility is endless :-)

[Baris Karadogan]

Zheng,
Got a Web 2.0 idea within SL? Know somebody who does? Let's hear it.

[Kevin]

There is a great podcast about this in the first HBR Ideacast. Check it out.

[Abdul Qabiz]

Indeed! That's what Yahoo! Avatars, MSN etc been doing for sometime..

-abdul