1. Marketing & Virtual Worlds Virtual worlds are dead: long live the virtual Washington University 26th May 2011

2. Outline What this IS and is NOT Me VW’s and Marketing Future Questions

3. What this IS and is NOT I’m going to cover Virtual worlds in the broad sense Relationships with marketing and business I’m NOT going to focus on Second Life In-world business models

4. Ren Rez Day: 11 November 2003 Global Head of Strategy: Internet, Applications, Digital Media & non-portfolio Cable & Wireless. Product strategy consulting: VW, Not-for profit, teclo’s UK Government Commercial Strategy: Cloud Public Policy and emerging media Ethics of technology Blog: terranova.blog.com Did anyone answer the quiz question about me?

5. Eco System

6. Eco System

7. Virtual Worlds Bartle’s VW Characteristics It is shared and persistent Interactions occur in real-time There is an underlying automated rule set, the ‘physics’ that determines how individuals effect changes Individuals represented within the world and beyond….

8. Virtual Worlds

9. Eco System

10. Eco System

11. World / Brand relationships Brands entering Worlds World World as Brand Brands entering & exiting Worlds Brand outside the World Brand / World collision Co-Branding Brand as World In-world Brands

12. Brand beyond The Virtual World

13. VW the product

14. VW the product

15. Marketing the world

16. Brand beyond The brand of a sufficiently successful world can be extended External Merchandise Product extensions Co-branding Internal Digital Goods

17. Brand beyond External

18. World as Brand: Merchandise

19. World as Brand: Extension

20. World as Brand: Co-branding

21. World as Brand: Co-branding

22. Brand beyond Internal

23. World as Brand: Internal

24. World as Brand: Internal

25. World as Brand: Internal

26. In-World Branding

27. Brands entering the world

28. Brands entering & exiting the world

29. Brand as World

30. Business

31. Business Non VW companies that Use VW for business outcomes Run in-world business

32. Business uses VWs Brand Promotion, sales etc. Meet, Share, Decide Collaborative Creation Teach and Learn

33. Business within VWs Who are the customers? B2B See previous slide B2U Business to User

34. SL / OS business model tree

35. 3rd Sector

36. 3rd Sector See Business (above) Same but different: Money raising WoW Panda Profile raising Walk for life Engagement Virtual Bikes

37. Education

38. Education See us now Like business & 3rd Sector

39. Consumers

40. Eco System

41. Brand beyond Business Models

42. VW Consumer Business Model

43. VW Business Models Primary Subscription Freemium White Label Secondary Boxes Services Objects Advertising

44. Brand beyond The Rise and Rise and Rise of Freemium

45. Power Laws ARPU > UAC = 

46. VW Business Models

47. VW Business Models Source: Games Brief / Social Gold Key: Enable those that want, to spend as much as they want

48. VW Business Models TechCrunch / Inside Virtual Goods / Lightspeed -ARPU estimates Virtual gifts: up to $0.50 Simulation games: $1.00 + Club Penguin / Habbo: $1.40 Online Poker: $2.00

49. VW Business Models: Asia Puppy Red 50% revenue 1% users PIGG ARPU: $15 pm GREE Monthly Page Views: 35.7 Billion http://games4networks.posterous.com/?tag=arpu

50. VW Business Models Summary Freemium is dominating Asia does it much better than the West There’s a huge untapped market

51. Brand beyond Branding

52. Brand business model + =

53. Consumers Engagement Simple Average Habbo Session: 43 min Second Life: varies seconds to hours Advanced: Co-design Interaction Touch the brand Identity Be the brand

54. Consumers Augmentation The Hills: stars in-world BBC player: always with you Emersion Coke Studios Brand experience is pushed much further than often the physical

55. Brand beyond Business

56. Business ROI

57. Brand beyond Issues

58. Virtual Worlds Pushing the Freemium limits Market Saturation Regulatory difference and uncertainty

59. Brand experience Control Copying Hi-jacking Dilution Getting it right & loosing control

60. Business Businesses Using VW Privacy / Secrecy Employment law Culture Training Technology

61. Business In-world business $ expectations & power laws Single platform investment Employment law Property law Platform owner & reality of IP

62. Future

63. Future The BIG Problems

64. Future Why are virtual worlds not bigger business Barriers to entry Switching costs Characteristics Social Location There not here

65. Social is dead What is social media? Together apart Together together Re-connection “social social” Facebook / Spotify – play together Long Live Social

66. Location is dead What is Location? Street / Building Offer tie in Right here, right now “micro-location” Long Live Location

67. Virtual Worlds are dead What is a virtual world? A thing separated In browser Facebook / Unity3D Augmented Reality Making the physical world virtual Color Long Live Virtual

68. Future Conclusion

69. Conclusion VW’s a niche Education Meeting Social End of an interaction continuum Intimacy and exclusion is heightened The marketing mix New experience are more fluid, more here, more now

70. Future The End Q’s?