A couple of years ago, it seemed the time had come for
virtual worlds.
The poster
child was Second Life.
Organisations
of all stripes were falling over themselves to be
associated with this latest in social networking as the virtues
of the next big thing were relentlessly extolled.
Lately, however, the hype seems to have died. The flurry of
press releases and news stories have abated and many an enterprise
has quietly withdrawn from the experiment or simply let things
drop. So is it all over for virtual or 'synthetic' worlds, or is
there life in the young dog yet?
Steve Prentice,
vice-president
at Gartner, believes the initial wave of publicity around
public virtual worlds has now peaked and
disillusionment is starting to set in, which is leading to a
retrenchment.
"Public virtual worlds are the area where there's a general
level of frustration and dissatisfaction because of difficulties in
using them and issues around reliability and robustness, which has
taken its toll from the enterprise perspective. This means that
those not drinking the Kool-Aid are increasingly sceptical," Steve
Prentice says.
While there are still pockets of people that are very keen, this
comprises only a small part of the market, although sites for
under-12s such as BarbieGirls, and for young teens and adults
such as Habbo, are showing steady growth.
But Jonathan Yarmis, vice-president of disruptive technologies
at AMR Research, points out the market is still only in the early
adopter phase and that, while it was initially "way over-hyped", it
is important not to ignore both short-term successes and the
long-term impact of such sites.
While initiatives setting up virtual offices or showrooms to
sell virtual products have tended to fail, more successful
applications include
using public sites for presentations or shareholder
meetings.
These are usually complementary to existing telephone or web
conferences, says Prentice, but they offer a
richer communications environment while providing particular
groups with direct access to top executives in a way that would not
normally be possible.
Other success stories are based on activities that are
unfeasible from a time or cost point of view in the physical world.
Jonathan Yarmis cites the example of an interior designer he knows
in St Louis, Missouri, who uses Second Life to demonstrate work to
customers to give them an idea of what their redesigned home might
look like. Some retailers use the same principle to test consumer
behaviour in store layouts without going through costly physical
construction projects.
"At this point, it's mainly about experimentation. Most
organisations have done nothing, but those that are doing something
are usually in the first or second pilot and are doing it from the
perspective of 'let's experiment and see what happens'," Yarmis
explains.
One organisation that has gone down this route is L'Oreal Paris
(UK). It launched a virtual marketing campaign in Second Life
earlier this year, with the help of consultancy K Zero. The firm
partnered a range of virtual fashion stores, such as Nuclear
Boutique, to promote and stock four make-up looks for avatars.
These were made available for free, but interested parties had to
initiate the transactions themselves rather than being handed items
by teams of virtual product promoters.
The activity was underpinned by targeted advertising in fashion
and clothing-related Second Life magazines and websites, but not in
the physical world. During the three-month campaign, the service
was accessed 34,000 times. There are believed to be 12 million
subscribers to the Second Life site, of which about one million are
thought to be active.
Hal Kimber, head of CRM and the internet at L'Oreal Paris (UK),
explains the rationale behind the move: "We'd seen the huge growth
in members of Second Life and felt it was appropriate to trial some
form of activity targeted to this audience. If consumers
increasingly interact online in virtual 3-D environments, then
clearly we need to begin to understand if and how we can best
interact with them."
The key benefits of the campaign, meanwhile, related to the
positive PR generated and the lessons learned in understanding "how
virtual worlds can be incorporated into our online marketing
strategy", says Hal Kimber. The key challenge in this context was
developing "activity that is in keeping with your brand values and
proposition offline", but new initiatives are likely to follow,
Kimber adds.
An organisation that has embraced the concept more widely,
however, is management consultancy, PA Consulting. It set up an
office in Second Life about two years ago, initially to showcase
its products and services before deciding six months later to staff
the site with an autobot to meet, greet and interact with
visitors.
The company now operates a shift rota with six freelance staff,
who are paid in virtual money and receive an alert when someone
arrives. David Sumray, a managing consultant and Second Life lead
at PA, explains: "The personal touch is very important as it gives
someone the ability to participate actively in our world. You need
interaction as the virtual world construct is about participation.
Otherwise it's dull and a waste of time as there's no reason for
users to engage or come back."
The office is now also used to host periodic events, run
workshops with clients in side-rooms and for internal meetings to
enable globally dispersed staff to brainstorm ideas and share
information as a supplement to more traditional audio- and
video-conferences. It even served to help recruit two graduates who
visited speculatively.
While it is now possible to build a presence in about 10 days
for about £100,000 using consultancies, David Sumray warns that the
key pitfalls lie in trying to emulate something that exists in the
real world.
"The technical issues can be dealt with fairly quickly and are
pretty straightforward, but you'll need to think about things
differently," he says. "Setting up a shop front on its own doesn't
work - it has to be more participative than that. So it's about
creating ideas for new markets, learning applications and
collaboration."
This is leading some organisations to hire behavioural
scientists and
anthropologists to understand how people interact. But, says
Prentice, it is equally important for the business to have a clear
idea about what it wants to achieve and the benefits it expects to
gain in taking this path.
"Nine out of ten public virtual worlds projects will fail in the
next 18 months because of a lack of clear objectives. But if you
ask whether a project was successful, people often can't give an
answer because they never defined what success was. In today's
economic climate, however, the chief financial officer is likely to
say that 'if it wasn't a success, it was a failure'," he warns.
Other challenges, meanwhile, relate to managing the
organisation's brand and reputation, not least because of the
threat of 'griefers' intent on causing disruption in meetings and
the like. Additional risks exist in the tax status of various
activities and the potential for money laundering.
Kiran Sandford, a partner and head of the IT group at lawyers
Mishcon de Raya, explains: "It's like the internet was 10 years ago
when it was thought of as the legal wild west because people didn't
know how or what laws applied. But one of the problems with a
virtual world is that it's anonymous so if there's been an IP
infringement or criminal activity, trying to get at an avatar to do
anything about it is going to be difficult."
Gianfranco Cecconi, a manager at consultancy Deloitte's
technology integration practice, believes organisations need to
look at the upfront and ongoing costs of the venture, which many
forget.
He likewise warns there can be an impact on the IT
infrastructure in general - and the network in particular - if the
latter is not properly sized, as virtual world sites tend to be
bandwidth-hungry.
Prentice advises: "This is not the time to be setting up shop in
a public virtual world." Instead he believes the main use of the
technology over the next few years will be in so-called
'intraverses' or virtual world environments that either sit on
companies' own infrastructure or their service provider's, behind
the firewall. Intraverses have the advantage of being easily
controllable becausee access, activities and security issues can be
more easily managed than on a public site.
A good application to start with in this context is training and
role-based learning because "you know the objectives and what
you're going to spend. This means that you can measure the benefits
and improvements and show a return on investment," Prentice
says.
Stage two - which is likely to start appearing at the end of
this year - will see enterprises introducing project-based
collaboration environments, for example enabling virtual teams
across multiple locations to sit in virtual conference rooms and
talk avatar-to-avatar.
Once the validity of these initiatives have been established, it
becomes possible to "recreate conversations over the water cooler",
says Prentice. The goal here is to enable staff in increasingly
virtual organisations to meet online to generate a stronger feeling
of community.
But only in two or three years' time, when such projects have
been tried and tested and virtual world technology and practices
have become more mature, will enterprises be ready to venture out
in any numbers onto public sites again.
"I remain confident that in 10 years time, virtual worlds will
be as significant as the World Wide Web because they're an
immersive environment and it's an essential part of human nature to
communicate. This has the potential to be huge,
but not for another five years or so as it's been over-hyped.
But it's now time to get down to the hard work because this is a
people issue not a technology one," concludes Prentice.
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