I spent another great session at the VIO seminar in Second Life on Monday morning (my time). Xander Newman covered how to deal with real life businesses that are using Second Life for vCommerce. All great stuff and it, deservedly, drew an awesome crowd. However, at the usual after-seminar discussion someone mentioned that they wished they could buy pizza using Second Life. Buying real life goods from a virtual world is not a new thing. Both Dell and American Apparel tried it in Second Life back in 2006. By all accounts both were dismal failures. Likewise delivering pizza (or any other real life product) faces some monumental hurdles to make the experience both worthwhile for the retailer and a valuable alternative to the comsumer.

Believing that something mundane is cooler, better, more elvish when done in Second Life or any other virtual world is hardly a new phenomenon. Back in the late eighties it was considered cool to use the command line to trigger the Coke machine to deliver a can of Coke at the local university computer club. In the nineties it was considered cool to order pizza over the web. The geek-set in particular are known for pushing the boundaries of technology in order to achieve an otherwise mundane result. There’s nothing wrong with that, in fact pizza ordering over the web has become a major marketing differentiation point for some companies. One that their competitors have rapidly employed as well. However doing something for fun and making it into a viable business solution are two very different things.

Consider the problems associated with attempting to deliver pizza from Second Life:

1. Pizza has a limited shelf-life period and so must be provided locally (usually within 30mins or it’s free =). Second Life is global. So any pizza franchise offering orders from Second Life must have a worldwide network of stores. The only pizza chain I know that has anything resembling that is Pizza Hut and they don’t even have a global ordering system for their web interface
2. Most pizza places are open (and deliver) only during limited hours. Second Life is open 24/7.
3. There’s nothing linking your Second Life avatar to you and your delivery address. Therefore the potential for fraud is high. Especially with non-pay info accounts.
4. The Second Life populace is extremely small in comparison to other (and more useful) ordering options like the web or telephone so the ROI is likely to be comparatively small.

One option that may work as a marketing solution is linking a Second Life object to a web interface so that clicking on the object brings up an external web site where you can order your pizza. That doesn’t get around the first two hurdles mentioned above but it may be worth examining as option for a major pizza chain. Certainly the initial outlay would be minimal. However, it may still be non-viable until Second Life has better browser implementation.

So, if Pizza is problematic then what about other real life goods? One option that at least initially looks appealing is the furniture market. An organisation like Ikea who have a worldwide distribution network could conceivably benefit from having a virtual showroom where consumers could see their virtual items on display, buy the virtual item and then try them in a mock-up of their real life home or office.

However even here we’re faced with hurdles that may make the idea non-viable:

1. Second Life’s modelling features are very limited. Getting exact models from an external source and importing them into Second Life is difficult. Second Life only accepts a small number of modelling formats.
2. Even when you’re able to import the models, Second Life may not be able to render them exactly as they appear in the real world. This may create potential legal problems depending on where you are delivering the goods. A disclaimer mentioning the possible differences between the virtual and real-world objects may suffice but what if it doesn’t? It’s something that needs considering during the planning stages
3. At least in Ikea’s case, different stores sell different goods and sometimes at different prices. This means that ordering in Second Life and having the local store deliver it can pose a problem.

Delivering real world goods using a virtual world interface isn’t impossible, but it should never be done just because you can. The questions that always needs to be asked are why is this better? Why are we doing this? How is this helping us? What makes this better for the customer? Only after you have answered them should you consider implementing it.

Today I attended the VIO business seminar in Second Life. The seminars are scheduled every Sunday at 11am SLT (US Pacific) and each has a speaker talking about a specific virtual-world business topic. Today’s speech was on machinima and AWM Mars and Ariella Languish gave very good presentations. One of the issues that was raised by an audience member was whether it was worthwhile for a purely in-world business to run a machinima advertisement. I’d like to discuss that amid a broader aspect of social media marketing.

Of course the short answer to the question is: probably not. The longer answer is much more meaningful to the broader business community in that it depends on what you’re trying to achieve.

The reason it is probably not worth it for many purely inworld businesses to run video advertising is that the costs involved in producing and streaming are quite high (possibly in the thousands of $US), whereas the exposure for your target market is likely to be quite minimal. In strictly monetary terms the apparent ROI would appear to be inadequately low. That said and done, I do know business owners that swear by it and who regularly run ads on SLCN. You ask them why and they will tell you that the times when they don’t run the commercials their sims and their web sites suffered a noticeable decrease in traffic. Obviously, for them, machinima advertising is having a positive effect. But I have to say that they are probably the exception to the rule.

One of the problems is methodology. Mimicking television without having the benefits that the broadcast medium brings is ill-conceived. There just simply aren’t the numbers watching and, more importantly, buying. My figures for SLCN are old, but even the ratings for our local community TV station exceeded SLCN’s viewing figures by an order of magnitude. I’m not trying to take anything away from SLCN, I’m just simply pointing out that using the same techniques that television uses will more than likely not work. And this applies not only just to in-world businesses but also to real-world entities that are using the web for promotion. It needs to be done differently.

Television, radio and print advertising as well as the majority of business web sites are push media. That means they push the information out to all and sundry in the hope that a large enough percentage will view, notice and act upon it. They tell us how great they are, that our lives are incomplete without their widget, and why it is better than all the other (similar) widgets on the market. It works – for some – but there is also a different approach.

Most commercial transactions are based on trust. We trust the local store to sell us a product, hopefully with a friendly smile and the minimum of fuss. But what happens when there is no smile or we have a bad buying experience? We usually find an alternative. Maybe travel a further kilometre down the road to another store.

If you build trust then you’re more likely to have repeat customerage. One of the excellent ways to build trust is to build communities. Consider it just another facet to delivering outstanding service. By building communities I’m not just talking about collecting a bunch of email addresses or snail mail addresses and sending out a weekly email of bargains and new products. That’s push media. What I’m talking about is creating pull media – an environment where customers are not only actively engaged in discussions with you and your staff about your products and business, but actually readily return just to engage you and the other customers. This is the essence of social media marketing.

So, how can an in-world business use social media (and in particular machinima) in their marketing? Well the first thing is create something you want to watch – preferably multiple times. If you want to watch it then chances are others will too. Don’t make it an advertisement, make it entertainment. The trick is to create content that your customers want to use. And then you need to create avenues for your customers to engage with you. For an in-world business that may be a weekly chat session disguised as a party or some similar event. Get out, have you and your staff meet the people and have them meet you. Enjoy yourself. For an online business, you can always use blogs, forums, virtual worlds or establish a twitter feed. But don’t fall into the trap of using them solely as a push media tool. What you want is to engage your customers and create something they want to come back to repeatedly.

Used well, machinima is a powerful marketing tool. There’s no better way to provide information or to emotionally influence your customers. But it can only ever be part of the solution. To make the most of it you must entertain as well as inform.