As you can see by clicking on the animated Snapple (owned by Cadbury Schweppes - NYSE: CSG) Meez avatars on the left, we just launched our latest media and product placement deal on Meez, as well as on AOL Instant Messenger (NYSE: TWX - who did the Snapple sale), where you can trigger a wide set of cool Meez AIM Expressions animations with words like "The Force" or "Rock", as well as acquire fun clothing and backgrounds which reflect the spirit of Snapple's new antioxidant Wa+er line.
Coming out of GDC last week, this product placement topic is hotter than ever as large consumer-packaged product companies look for innovative, but measurable, ways to connect with their consumers who spend ever-increasing amounts of time in social networks and IM platforms. CPC ads are a great vehicle for many companies, but less so for the fashion, beauty, food & beverage, gaming and entertainment companies who like to communicate brand values in their ads, not just text.
There have been numerous attempts to integrate brands into 3D worlds such as Second Life, but the early adopter nature of those audiences combined with the issues inherent in large client download worlds have caused many of the bigger consumer brands to back away from that channel. Almost all Massively Multiplayer Worlds are too thematic (fantasy, sci-fi, western) to accept any normal set of ads, and the kids-oriented worlds like WebKinz have limited advertising options due to laws surround advertising to children. So we come back to browser-based virtual rooms and worlds as the primary way for brands to reach consumers, similar to what we soft-launched on Facebook here.
Some colleagues in the virtual world business question why one should ever have advertising since virtual transactions will be the sole source of revenue, as it often is in Asian games. The answer is similar to what you see in In-Game Advertising - it helps defer the cost of the service/game for users, and if used correctly, it often makes the service more realistic since brands are everywhere in our normal lives - e.g. Nike shoes and Baby Phat clothing are some of our top user requests. In addition, the US is the single largest ad market in the world ($300B), and since no virtual world company will sell enough branded virtual goods to matter to any one brand, product placement advertising is a far better way for a CPG to reach and influence their audience, just like they do in television, radio and magazines.
There are other successful product placement examples emerging outside of the 20 deals we have done in Meez. The agency Millions of Us did a phenomenal project with World Wrestling Entertainment (NYSE: WWE) on virtual world Gaia where they introduced a wide set of items and personalities attached to WWE. Sunkist had a fun project last year with tween world Habbo Hotel, and Toyota Scion has been involved in multiple worlds, including Whyville.
The key for all of these projects is to have measurability, just like you see in other internet advertising - it can't be just about cool sponsorships with no ROI. The visual parts of the promotions are important since you can communicate the brand value better than text, but it takes a little more work on the provider side - it took us a while to work with Snapple on the types of animations and AIM key words that would match the campaign. And then you need to follow up with a comprehensive set of data about how users interacted with the products, and what were other related results such as clicks to the advertiser's site, so that the agency can report back how the campaign performed.
However, it's worth it for all sides to focus on delivering a great experience for users and for the advertisers, especially as we look at ways to monetize the 90+% of mainstream virtual world users who may not ever purchase a virtual good. There may be some worlds like Second Life which have no need for advertisers or brands, but for most mainstream services, this is a key opportunity. Take a look at the Meez Flashdance video here, and you can see why Marshalls (sold by our agency partner Alloy) is happy with their deal.