In 'Second Life,' a Virtual Ad Agency Arises

  |  May 6, 2005   |  Comments

A marketer and 3D gaming fan has built an ad network inside the popular MMORPG.

Get enough people involved in a massively multi-player online role-playing game (MMORPG) and it's likely an economy will arise. In established MMORG environments, from the fantasy hit Everquest to the teen-focused Neopets, currency systems and retail markets are common.

What's been lacking -- until now -- is an advertising model to support the purveyors of in-game products.

A fellow who calls himself Rathe Underthorn hopes to fill the gap. Since January, Underthorn has been trying to cultivate a virtual advertising market within the MMORPG Second Life, which boasts about 27,000 active players. Underthorn's in-game agency and ad network, called MetaAdverse, aims to support sellers eager for greater distribution of their virtual products within the game.

"Second Life lets you have property rights to the things you create, which is unusual for a 3D environment like this," said Underthorn, who has a background in digital marketing and would not share his real name. "It has a dynamic economy to it. As that started to grow, I felt people needed a way to get the message of their products out."

Underthorn's advertiser clients are enterprising players who produce clothing, vehicles and other items for sale within the game environment. His publisher clients operate venues in the game where avatars congregate. He typically lets advertisers name their preferred CPM rate and leaves it to publishers to accept or refuse that rate.

The ads take the form of billboards and wall signs at or near eye level, and an impression is measured as 15 seconds of cumulative exposure.

"I track all the impressions," he said. "We're able to track every unique user: which ads they see, when and where they see them," said Underthorn. "You can identify their character name, but no personal information."

Underthorn has measured approximately 1.2 million impressions on the MetaAdverse network. He estimates 60 percent of the total gaming population of Second Life has seen his ads. While the game doesn't support conversion metrics, some advertisers reported 160 percent sales growth while the ads are running. When the ads stop, sales immediately drop off, according to Underthorn.

Publishers in the network have earned about $345,000 in the game's currency, the Linden, so far. Measured against the current exchange rate on some third party sites of $4 U.S. per $1,000 Linden, that comes out to $1,380.

Underthorn's cumulative take, then, is in the range of $400 to $500 U.S. since the January launch. That doesn't quite pay the bills, so in real life, Underthorn works for a digital marketing agency in Los Angeles. He declined to name the firm, which he says has about 250 employees and several big name clients.

So far, MetaAdverse is a solo effort. As demand for its services picks up, Underthorn said he'll consider adding partners -- and will perhaps offer creative services.

"I do intend to partner with some people as the volume picks up," he said. "A lot of advertisers don't have the background in creating campaigns. I've considered setting up a way to get them connected with graphic designers. It'll be interesting to see if someone takes up that role."

Second Life is nowhere near the most popular MMORPG. So why has the virtual ad agency idea taken off in this particular game? In part, it's because Second Life is much more flexible than most gaming systems. Through built-in character animation and scripting tools, it allows people to visualize and create almost anything they want. That's how characters are able to operate venues and create products that have resale value.

"Some of the people I know who are advertising are actually able to make a living. Some are making $60,000 a year. They sell clothing, create vehicles and weapons," said Underthorn. "It almost allows you to do micro-payments, which isn't easy to do on the Web otherwise. Here you can sell something for .50, but you can sell it to a lot of people."

The next logical leap would be for Underthorn to begin accepting advertising for real-world products, something that until recently has been against the rules set by Linden Labs, which created the game.

"There was a policy in place by the creators of Second Life that prevented you from advertising products or services not related to this world," he said. "I had limited the advertising to Second Life-based content, but it seems that policy no longer exists, so it's a new possibility. I've been debating it. It should be interesting to see where it goes."

Linden Labs couldn't be reached for comment about the virtual agency.

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Zachary Rodgers

Until March 2012, Zach Rodgers was managing editor of ClickZ's award-winning coverage of news and trends in digital marketing. He reported on the rise of web companies, data markets, ad technologies, and government Internet policy, among other subjects. 

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