SharkJumping

27 Dresses Boutique Launches on Meez

We just launched a new sponsored boutique on Meez for the DVD release of the Katherine Heigl smash hit, 27 Dresses, from Fox (NYSE: NWS).  As one might imagine, a fashion-oriented movie is just about a perfect fit for Meez users since we built everything from cool backgrounds to the "catching the bouquet" animation, and of course, some of the great dresses from the movie - click the image to see the animation. 

Along with a terrific reception for our NikeID deal, as well as our ABC Family Princess items, we're continuing to deliver great value for branded advertisers looking for innovative and effective ways to reach an audience that is increasingly online in IM, social media and in games, all places where our 5M+ users export their Meez to represent themselves.

Meez Launches Nike, plus ABC Family Princess

Showing the breadth of what we offer consumer brands through Meez, this week we launched two new brand boutiques, NIke ID and ABC Family Princess.  Our ad agency Alloy (NASDAQ: ALOY) delivered both deals, which involved us creating a wide range of clothing items (tens of key NIKE ID shoes plus amazing Princess dresses and tiaras), fun athletic animations for NIke (NYSE: NKE), plus branded backgrounds which our users adopt by the thousands each day since launch.

The nice thing is we continue to see amazing user adoption of these advertiser-driven items since they reflect how our users want to interact with branded assets, and then use them throughout their online lives, including AIM, blogs, social media, games and  cellular phones.  And we track all of this usage, and report it back to the clients, so it's a win/win for everyone versus just doing a general media buy.

Avatars and Moms - A Key Opportunity

The bulk of the current avatar/virtual world press is focused around a younger demographic, starting with the tween worlds of Webkinz, Club Penguin and Runescape, and then followed by slightly older-leaning sites like Habbo, Zwinky and Gaia Online.  What's interesting is that at Meez we definitely see a primary user base in the late-teen audience, but we also see a hard core user base among mothers, originating mostly from Cafe Mom, Babycenter, and 2 Peas in a Bucket.

We originally thought that this was primarily due to an aspirational group of teenagers role playing as mothers in our forums and other community areas, but it became clear when looking deeper at the data that this was actually a significant group of 25-45 year old mothers, with an intense interest in online communication, but without a suitable identity until they found Meez.  Why use an avatar?  Since it is both more flexible and less personal than a photograph, it ends up that an avatar is perfect for forums, IM and social media.

So we see thousands of incoming users a day looking for our pregnant and mom's item boutiques, and those items are generally in our top 10% of all items saved or purchased each week on Meez.  Our older users repeatedly asked for additional body types ("my meez is too thin" was the top comment), and we delivered a wide set of 3D body types, including, thin, athletic, curvy, plump and pregnant, and one would be amazed at the diversity of female choices each day, unlike men who almost always choose "Buff" (who knew men were visually oriented ?).  And we continue to be surprised at the velocity and variety of You Tube Meez videos produced each day, including this Alison Krauss-themed, child-related music video (here) so we're pretty jazzed about the overall trends among a large set of users.

The key point is that avatars are used by a much wider audience than just teenagers - moms are a growing demographic for Meez, and we'll easily see a time within 5 years where literally everyone who is regularly online has a primary avatar.  This will create an additional revenue source beyond teens since this demographic is an incredibly attractive advertising target as well as a lucrative virtual item audience - e.g. most of our pregnant-related items are our top-selling virtual items.  So we're looking forward to diving more deeply into this sector.

Fantasy Avatars vs Identity Avatars

With the launch of Meez Roomz on Facebook (here), I get asked a lot about whether our avatars and those in Second Life are similar.  The short answer is that the basic purpose of an avatar, which is to represent one in a digital world, is the same in both scenarios, but that how our audience uses them is quite different.

The best way to look at this is that Second Life avatars are often used to represent fantasy versions of users, which is one of the reasons gender switching is so high in SL, as it also is in Massively Multiplayer games like World of Warcraft.   Anywhere between 1/3 and 2/3 of female avatars in these situations are said to be male in the real world.  A recent Nottingham Trent University study (here) has recently come to the same conclusion.

Meez users could technically do that as well, but because Meez avatars are used primarily to represent the user in their real world social media and IM systems (MySpace, Live Journal, AIM, Facebook, mobile phone, etc.), our studies show that only a very small percentage of our users are switching genders.  We have what we call Identity Avatars, not Fantasy Avatars.  A Meez is a more flexible way to show everyone online what type of person you are, and you can easily change it as your mood changes - it's like the ring tone of the Internet - a song that makes you feel good, and also tells everyone around you what type of music you like. 

There is certainly room for both types of avatars in the world, but we believe strongly that Identity avatars are a much larger market in the long run (although fantasy avatars are great in early adopter markets), especially as our users go increasingly portable with their Meez, vs having different ones for each online venue.  Plus the advertising opportunities are far greater in real world scenarios than in fantasy-based ones, as we've shown recently with our most recent integrated brand deals with AT&T Digital World and Snapple.

Next we'll start running an online advertising campaign - "Come to Meez, where women are actually women" (somewhat kidding)

The Rise of Product Placement and Avatars

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.