"Second Life: the New New Thing" by Ken Bernhardt Regents' Professor of Marketing and Assistant Dean for Corporate Relations  Robinson College of Business, Georgia State University Atlanta Business Chronicle Column January 26, 2007 Last Friday I participated in the judging for the 2007 Marketing Awards for Excellence (MAX Awards) Program co-sponsored by Atlanta Business Chronicle and the Robinson College of Business at Georgia State University. These awards honor the outstanding marketing innovations developed in the state during the previous year. That experience, together with the rash of December-January lists of hot new things by various publications, got me thinking about trends that marketers need to be tracking. Foremost among these is the Internet sensation, San Francisco-based Linden Labs' Second Life (secondlife.com). Second Life has been featured recently in Time magazine's Person of the Year issue, in AdWeek's Year in Review "Top 10 Ideas of 2006," and in a Business Week cover story. If blogs were the hot new thing in 2005 and YouTube was in 2006, I predict Second Life will be it in 2007. As described in Wikipedia (wikipedia.org), Second Life is an Internet-based three-dimensional virtual world where users (called "residents") interact with each other through avatars (the digital version of you). If you have played computer games, you have a rough idea of what Second Life looks like, but there are important differences. Unlike computer games, Second Life is user-generated content, entirely built, owned and maintained by its residents. There are no rules, no goals, and nothing to win. One can create an avatar (on-screen graphic characters) to represent your "second life" by selecting your sex, physical appearance, clothes, and name. The residents set up communities and can offer goods and services which are bought and sold using Linden dollars, convertible into U.S. dollars (at roughly 270 Lindens to the dollar). One can rent or buy land and islands, set up virtual stores, and create experiences with other residents. Unlike other sites, the residents own the content they create and can sell it to others. Starting the year with a membership of 100,000 in early 2006, by mid-October Second Life hit 1 million on-line inhabitants, and this increased to 2 million by mid-December. It now has over 2.5 million. The median age is 36 years old and 43 percent are female. Some 75,000 people log in each day and spend an average of 3 hours there. Users may join for free, but many choose to pay monthly fees of $9.95 which gives them access to Linden dollars to spend. Dozens of marketers have been experimenting with how to use Second Life as a marketing vehicle, creating experiences around their brands. Companies can sell or give away virtual products that create strong brand connections but with no marginal cost of production. Toyota was the first car maker to utilize Second Life, giving away virtual Scion vehicles, and Nissan and Pontiac have followed, selling cars for about 500 Linden dollars ($2 U.S.). Starwood Hotels was an early user, building a prototype of a new hotel brand, Aloft. Users could enter the hotel, examine the layout, rooms, and amenities. Starwood executives monitored how much time users spent in each area of the hotel and asked for suggestions for improvements from the residents. The virtual build allowed Aloft's design team to make adjustments before any bricks were laid. Several ideas were developed including having local artists' work displayed in the bar area. Earlier this month, Sears unveiled "Sears Virtual Home," a prototype showroom on Second Life. Customers can experiment with different cabinet and countertop colors in a kitchen and organize a garage with custom storage products. IBM has built a similar virtual store for Circuit City which is using it to test things and get feedback quickly. Wired Magazine has a virtual office and published a travel guide in Second Life. Reuters established a virtual news bureau and has a full time person covering what's happening in Second Life. IBM has been using its private island to host meetings with its employees throughout the world. Marketers have spent millions of dollars in developing their corporate websites and are now realizing that there are new ways to reach potential shoppers who are visiting other places online. Other companies with sites in Second Life include Disney, Nike, Adidas, Sony, and Intel. The opportunities on Second City are there for smaller companies as well. For example, American Apparel, a small retail chain, has opened a virtual branch store selling digital renderings of clothing modeled after its real life merchandise. Residents buying clothes in Second Life get a 15 percent discount at American Apparel's real world stores. It's not too late to make another New Year's resolution for 2007, to commit to staying on top of marketing innovations such as Second Life. Come to the MAX Awards breakfast on February 23rd at the Grand Hyatt to see the best marketing innovations developed in Georgia during 2006 (go to maxawards.com for registration information). You may get stimulated to develop the "New New Thing" that will blow away your competitors during 2007.