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The new ways of corporate communication in virtual environments: case studies of Second Life

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Content THE NEW WAYS OF CORPORATE COMMUNICATION IN
VIRTUAL ENVIRONMENTS:
CASE STUDIES OF SECOND LIFE
by
Jang Ho Moon
____________________________________________________________________
A Thesis Presented to the
FACULTY OF THE GRADUATE SCHOOL
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
MASTER OF ARTS
(STRATEGIC PUBLIC RELATIONS)
August 2007
Copyright 2007 Jang Ho Moon
ii
Acknowledgments
This thesis would not have been possible without the guidance and support of
a number of people. Many thanks to my thesis advisors Kwan Min Lee, Shannon
Campbell, and Jennifer Floto for their encouragement and inspiration, which made
this challenging project successful. In fact, the idea for this thesis came from a term
paper I wrote in Professor Kwan’s “Emerging Communication Technologies” class
in fall 2006, and provided me with a lifelong topic to research. Without Professor
Campbell’s guidance, I would not have fully appreciated the importance of
communication in both non-profit and non-governmental organizations. Also,
without Professor Floto’s wide-range coverage of public relations case studies, I
would not have been able to complete this thesis. I cannot say enough to express my
gratitude to these individuals. Lastly, I would like to give a special thanks to Dr. Jin,
who has been always with me.
iii
Table of Contents
Acknowledgments ii
List of Tables iv
List of Figures v
Abstract vi
Chapter 1. Introduction 1
1.1 The New Ways of Corporate Communication 1
1.2 Purpose of the Study 2
Chapter 2. Virtual Environments and Second Life 3
2.1 The Rise of Virtual Environments 3
2.2 What is Second Life? Why Is It a Valuable Communication Tool? 5
Chapter 3. Literature Review 11
3.1 Virtual Reality 11
3.2 New Internet Marketing Strategies 12
3.3 Integrated Marketing Communication (IMC) 13
3.4 The Effect of the Avatar: Communication Directed Toward Avatars 14
3.5 The Value of the Virtual Product Experience for Consumers 16
3.6 Social Presence as a Mediator of Virtual Experience 17
3.7 Virtual Community 18
Chapter 4. Case Studies 20
4.1 Marketing Communication 20
4.1.1 American Apparel 20
4.1.2 Toyota Scion 24
4.2 Non-Profit Organizations 26
4.2.1 Centers for Disease Control and Prevention (CDC) 27
4.2.2 American Cancer Society (ACS) 29
Chapter 5. Conclusion 33
5.1 Findings 33
5.2 Suggestions for Future Research 35
References 37
iv
List of Tables
Table 1. The top ten most popular MMOGs 3
Table 2. Brands in Second Life 20
v
List of Figures
Figure 1. Second Life registration count 6
Figure 2. Second Life monthly active users by age bucket 8
Figure 3. Second Life gender % by usage 8
Figure 4. Second Life active avatar count by country 9
Figure 5. Avatar creation in Second Life 10
Figure 6. American Apparel’s Second Life store 21
Figure 7. Inside American Apparel’s Second Life store 23
Figure 8. Toyota’s Second Life showroom 25
Figure 9. CDC’s virtual office in Second Life 27
vi
Abstract
As the Internet has evolved, corporate communication practitioners have
actively adopted new media technologies for their organizations’ communication
channels. One of the most recent—and experimental—trends in field of corporate
communications is the use of 3-D avatar-based virtual environments that interact
with organizations’ various stakeholders. This study examines the potential of virtual
environments as effective corporate communication channels and discusses four in-
depth case studies of campaigns that have been executed by several pioneering
organizations in Second Life, a virtual world where many corporate communication
initiatives can be observed among many virtual environments. Virtual environments
are a promising communication channel not only for for-profit brand marketing but
also non-profit communication initiatives. Corporate communication in Second Life,
however, should be carefully designed from the perspective of the virtual community
and should include an element of entertainment.
1
Chapter 1. Introduction
1.1 The New Ways of Corporate Communication
The term “corporate communication” includes many aspects. First and
foremost, corporate communication is a “vital management function in contemporary
organizations” (Goodman, 2000). Goodman (2000) also states that corporate
communication refers to the totality of a corporation's efforts to lead, motivate,
persuade, and inform its various publics, which include consumers, investors,
employees, and the media. He further notes that “corporate communication can
include such traditional disciplines as: public relations, investor relations, employee
relations, community relations, media relations, labor relations, government relations,
technical communication, training and employee development, marketing
communication, management communication.” As new Internet media such as
YouTube, MySpace, and blogs have evolved, corporate communication practitioners
have also actively adopted new media technologies as communication channels for
their organizations. More and more, corporations are using 3-D avatar-based virtual
environments—widely known as Massively Multiplayer Online Games (MMOGs) or
Multi-User-Virtual Environments (MUVEs)—to interact with their organizations’
stakeholders.
2
1.2 Purpose of the Study
This study discusses the potential of virtual environments, especially Second
Life, as effective corporate communication channels, based on in-depth case studies
that have been empirically executed by several pioneering organizations. After these
case studies are examined, strategic communication in virtual environments will be
discussed. Besides examining corporate case studies, this thesis discusses the role of
virtual environments in relation to non-profit organizations such as governmental
agencies and NGOs.
3
Chapter 2. Virtual Environments and Second life
2.1 The Rise of Virtual Environments
There are two main categories of 3-D virtual environments populated by
avatars. The older and more popular category consists of Massively Multiplayer
Online Role-Playing Games (MMORPGs) such as Lineage, World of Warcraft, and
EverQuest. The other category includes non-game virtual environments such as
Second life, There, and Habbo Hotel. The latter group occasionally includes game-
like elements, but the virtual environments in this category primarily offer
opportunities for social networking.
One of the most recent Internet trends is the rapid growth of virtual
environments. In fact, the attention surrounding various types of virtual
environments has never been greater. Table 1 shows the top ten most popular
MMOGs in terms of active users or subscribers, based on publicly available data.
Table 1. The top ten most popular MMOGs (Snow, 2007)
Rank Title Active Users / Subscribers Since Description
1 World of Warcraft 8.5 million subscribers 2004 Game
2 Habbo Hotel 7.5 million active users 2000 Non-Game
3 RuneScape 5 million active users 2001 Game
4 Club Penguin 4 million active users 2006 Non-Game
5 Webkinz 3.8 million active users 2005 Non-Game
6 Gaia Online 2 million active users 2003 Non-Game / Game
7 Guild Wars 2 million active users 2005 Game
8 Puzzle Pirates 1.5 million active users 2003 Game
9 Lineage I/II 1 million active users 1998 Game
10 Second Life 500,000 million active users 2003 Non-Game
4
Interestingly, more than half of the top ten virtual venues are non-game
virtual environments that mainly act as avatar-based venues for social networking.
As non-game virtual environments have grown more popular, both non-profit
organizations and for-profit companies have used them to communicate with target
audiences who may be difficult to reach through traditional media outlets.
Advertisers are also starting to explore these virtual environments as outlets for
experiential marketing, providing customers opportunities to interact with their
brands (Adweek, 2006). According to Adweek, the slogan “Get yourself a Second
Life” is one of the top ten most innovative ideas of 2006 for marketers (Adweek,
2006). In addition, communication practitioners of NGOs and governmental agencies
actively participate in virtual environments to communicate with audiences through
these new channels. Just like the hugely successful web-based social networking
sites MySpace.com and Facebook.com, virtual environments have become “the next
big thing” of the Internet (Olga, 2007). Technology consultant Gartner predicted that
80% of active Internet users and Fortune 500 enterprises will one day establish a
presence in virtual environments (Gartner, 2007). Among these various virtual
environments, Second life has gained the most popularity over the past few years. As
this virtual world has also received significant attention from mainstream media and
media users, Second life is no longer an esoteric communication channel or merely a
venue for extremely tech-savvy individuals.
5
2.2 What Is Second life? Why Is It a Valuable Communication Tool?
Just what is Second life? Succinctly explaining Second life to someone
unfamiliar with 3-D computer games such as Sims Online, internet social networking
places such as MySpace.com, or MMORPGs such as World of Warcraft can be quite
complicated, as Second life includes various complex elements. According to San
Francisco-based Linden Lab, the company behind Second life, it is a “3-D virtual
world entirely built and owned by its residents.” This definition, however, does not
begin to adequately to describe the sophisticated virtual world of Second life.
Since its 2003 launch, Second life has grown explosively. As of June 2007,
more than seven million “residents” from around the world inhabit Second life.
Although there’s some controversy surrounding registration count verses active-user
count, it is evident that Second life is the most mainstream and popular virtual
environment for general Internet users. Figure 1 shows the fast-paced growth of
Second life.
Beyond the tremendous popularity of Second life, several elements
differentiate it from other popular virtual worlds. In fact, these unique characteristics
are the reasons why corporate America is paying very close attention to Second life
as a valuable communication channel.
6
Figure 1. Second life registration count
First of all, Second life is very different from competitive fantasy games such
as World of War Craft, the most popular MMORPG. It is important to understand
that there are no “goals” or “objectives” in Second life, as it is not a game. Users do
not play roles such as warriors or wizards, and they aren’t on missions to capture
territory or save princesses. Instead, users create and determine what they want to do
through Second life’s solid design tool called “Prims” (Rymaszewski, et al., 2007).
Using this tool, residents can create almost anything in their virtual space, and they
retain the intellectual rights to their creations. Furthermore, residents in Second life
use Linden Dollar, named after Linden Lab, which can be transformed into real
money. Thus, Second life provides unlimited opportunities for users to produce
content, and this content can be exchanged and circulated as currency. Since users
7
have their own currency in the virtual world, which is convertible into real money,
residents of Second life can buy and sell virtual real estate and items such as
furniture, T-shirts, and even airplanes, which are all made by Second life residents.
The ability to create commercial and cultural content—along with the use of
Linden Dollars—enables Second life users to run their own virtual businesses. Last
year, Business Week published a cover story on the huge success of Ansie Chung,
who earned one million dollars through her virtual real-estate business in Second life
(Hof, 2006). A virtual real-estate business involves designing sophisticated-looking
houses and selling them to other avatars. From virtual prostitutes to astrologists, the
possibility of virtual business is unlimited in Second life. The unique elements of
Second life—including its design tool, user-created content, and real-money based
environment—are the very reasons that corporations can execute nearly any type of
communication initiatives in Second life.
Second of all, Second life integrates a number of elements of the most
popular forms of new media: chat rooms, video games, online stores, user-generated
content, and social networking (Siklos, 2006). Users of Second life can meet people
online, talk to them, and do things together in real time. Second life residents also
build their own communities. A critical communication strategy for the residents of
Second life is to get to know their culture and immerse themselves in their virtual
cultural environment.
Third, the demographics of Second life residents are very different from those
of other virtual environments such as typical MMORPGs and MMOs designed for
8
children. As presented in Figure 2, the age range of 38% of Second life residents is
25–34, followed by 18–24 (27%), and 25–33 (21%). Interestingly, 12% of Second
life residents are over the age of 45. Figure 3 indicates that gender is quite balanced
in Second life: 57% of users are male and 43% are female.
Figure 2. Second life monthly active users by age bucket
Figure 3. Second life gender % by usage
9
Figure 4 shows how the virtual world of Second life is internationally diversified.
Figure 4. Second life active avatar count by country
Based on the demographics of Second life, it can be very cost-effective for
international corporations and non-profit organizations to reach international
audiences through one communication initiative.
Last but not least, a unique element of Second life is the use of 3-D avatars.
Users explore their virtual social environments with sophisticatedly designed avatars
that can represent themselves almost exactly. In Second life, there are no pre-existing
avatars. As Figure 5 shows, residents use a design tool to build and create their own
avatars from scratch, and they can create their own gender, face, figure, style, outfits,
occupation, class, etc. Second life residents have complete control over the creation
10
of their own avatar; thus, it is almost impossible to encounter identical avatars in
Second life. In addition, users can create an avatar very similar to themselves, or their
avatars can be an expression of their ideal self-image.
Figure 5. Avatar creation in Second life (Nood & Attema, 2006)
Due to the increasing popularity of avatars as well as the ability of companies
to generate consumer engagement with specific brands or products, online virtual
worlds provide unlimited marketing and business communication opportunities for
real-world products and services (Hemp, 2006).
11
Chapter 3: Literature Review
Very few studies have been performed on the emerging and promising field
of virtual environments. Virtual education is the most active research area in
academia, and marketing is the most popular topic among practitioners. This chapter
highlights what current literature says about Second life from a communication
perspective.
3.1 Virtual Reality
There are several types of virtual environments. Virtual reality (VR) is a
communication medium in a multi-user configuration but also functions as a
communication interface for a single user (Riva, 1999). Departing from this
dichotomous categorization, Second life is both a communication medium and a
communication interface as it functions as single-user human-computer interaction
as well as a social networking venue for multi-users.
The first Multi-User Dungeon/Domain/Dimension (MUD) was developed by
Richard Bartle and Roy Trubshaw at the University of Essex in an attempt to
facilitate multi-player role-playing games run over computer networks in late 1970s
(Bartle, 1999; Dourish, 1998). MUD enabled groups of individuals to build virtual
realities collaboratively. Despite limited visual and social cues, immersion in text-
based virtual environments can help thriving virtual communities demonstrate
characteristics of traditional communities, including love, hate, friendship, and
betrayal (Rheingold, 1993).
12
All Multi-User Virtual Environments (MUVEs) are characterized by
participants’ ability to a) access virtual contexts; b) interact with digital artifacts; c)
represent themselves through “avatars” (in some cases graphical and in others text-
based); d) communicate with other participants (in some cases also with computer-
based agents); and e) take part in experiences incorporating modeling and mentoring
regarding problems similar to those in real-world contexts (Dede, Nelson, Ketelhut,
Clarke, & Bowman, 2004).
The recent worldwide proliferation of MUVEs and the expanding number of
members signing up for them suggest that field of virtual environments is a
promising domain of research. IBM even predicts that Second life will be the
incipient stage of Web 3.0 and the company has invested a tremendous amount of its
budget in the research and development of this field (Kirkpatrick, 2007)
3.2 New Internet Marketing Strategies
Over the past few years, virtual communities—especially social networking
sites such as MySpace.com and facebook,com, as well as user-generated contents
sites such as YouTube—have received a great deal of attention. More recently,
individuals are exploring 3-D virtual worlds to seek different social networking
environments through avatars. And wherever audiences are, marketers rush in.
Through avatars, many companies have launched innovative brand-building
experiments in the virtual world. For example, in Sims Online, McDonald’s set up
virtual fast-food kiosks with automated employees working at the counter and
13
serving virtual burgers to virtual avatars. In the virtual world There, Nike promoted
its new shoe line, and avatars who buy and wear Nike shoes can run faster than other
avatars. In Second life, Dell held a press conference in the virtual world, announcing
that the company had opened an in-world island with a retail store in which residents
could order PCs to be delivered to their real homes.
Many marketing communication strategies in virtual worlds are focused on
avatar features. The avatar is the most conspicuous online manifestation of people’s
desire to experiment with alterative identities or project some private aspect of
themselves (Hemp, 2006). In addition, avatar-based virtual environments are ideal
venues for marketers because advertising has always targeted a powerful consumer
alter-ego (Hemp, 2006). With Second life’s intricate avatar design tool, new
marketing strategies targeting avatars are enhanced in Second life.
3.3 Integrated Marketing Communication (IMC)
Integrated marketing communication (IMC) is defined as a “cross-functional
process for creating and nourishing profitable relationships with customers and other
stakeholders by strategically controlling or influencing all messages sent to these
groups and encouraging data-driven, purposeful dialogue with them” (Duncan 2002,
p. 8). IMC has been described as a natural and inevitable result of progress in
promotional tools and convergence in media (Schultz, 1991 & 1996). It has also
become an integral component to many business marketing strategies.
14
Marketing practitioners and advertising firms have increasingly embraced an
IMC approach to their promotional efforts in order to achieve direct effects of the
individual communication tool used, as well as additional “synergistic” effects from
the combination of communications tools used (Thorson, et al., 2005). Vargo &
Lusch (2004) argue that IMC should replace diverse, limited-focus promotional
tools, and brand management should be used for initiating and maintaining a
continuing dialogue with customers.
As seen in recent marketing communication initiatives via Web 2.0 media
such as MySpace.com, YouTube, and blogs, channels of integrated marketing
communication are becoming increasingly diverse, sophisticated, and extensive.
Virtual environments are new marketing communication channels in which
marketers can present their products and brands to target audiences through
unprecedented strategies and tactics. Therefore, the fastest growing environment in
this category, Second life, has significant value as a venue that offers diverse
marketing communication channels.
3.4 The Effect of the Avatar: Communication Directed Toward
Avatars
Avatars are increasingly being used in online commerce, social virtual
environments, and long-distance conferences (Nowak & Rauh, 2005; Schroeder
2002). Thus, a virtual avatar is an individual’s physical/graphical representation in
various virtual environments and one type of user embodiment in mediated
15
environments (Jin, 2007). In Sims, for example, game players can create their own
virtual avatars in a virtual environment. Avatars are also widely used for various
consumer interfaces (Nowak & Rauh, 2005). For instance, all major instant-
messaging systems, online forum systems, and massive multi-user role-playing
games include an avatar feature (Persson, 2003).
“It is possible that the presence of avatar is a strong social cue that influences
people’s perceptions, leading them to perceive interfaces as more social” (Nass,
Steuer, Tauber, & Reeder, 1993). In a recent study, Nowak and Rauh (2005) argue
that people perceive more anthropomorphic avatars as more attractive and credible,
and thus people are more likely to choose to be represented by them.
In Second life, “avatars are the beings users create as representations of
themselves and through which they live and relate to others in these worlds” (Hemp,
2006). The avatars featured in Second life are designed with a very sophisticated 3-D
graphic tool and offer many detailed options that allow users to choose and modify
the appearance of their avatar. For example, once users choose the race and gender
of their avatar, they can modify the details of their avatar’s appearance, including
hair color, length of nose, shape of eyebrow, etc. Thus, avatars are “personal
creations” in Second life (Hemp, 2006). After users solidify their avatars’ physical
details, they can purchase clothing for their avatars in order to represent their “alter-
ego” appropriately. In this way, avatars in Second life are different from their
cartoon-like ancestors in that they are the most anthropomorphic avatars ever to
16
appear in a virtual social environment. Second life is an extraordinary world in which
“people-like-me” live their day-to-day virtual lives.
3.5 The Value of the Virtual Product Experience for Consumers
Li, Daugherty, and Biocca (2003) claim that marketers can increase the value
of the product information they present by creating compelling online virtual
experiences with their products. They also argue that marketers can engage
consumers in active shopping experiences by providing interactive 3-D
visualizations, and that virtual product experiences can help consumers by saving
them time and eliminating unnecessary information (2003).
Based on research on the marketing communication strategies conducted in
Second life to date, it is reasonable to conclude that nearly all of the strategies
include virtual product experience as a key element. For example, Second life
residents can experience an automotive product through avatars who can test-drive
the newly launched Scion in the virtual Toyota dealer shop. In addition, users can
visit a virtual American Apparel store, buy a T-shirt, and dress their avatar in it so
they can see how the T-shirt might look on themselves in real life.
Considering that the reward of the experience of a product purchase is in
many ways not the purchase of a physical item itself but the feeling that the product
affords (Pine II & Gilmore, 1998), and that the consumption experience consists of
both cognitive and emotional activities (Hirschman, 1984; Holbrook & Hirschman,
1982), the product experience and virtual product consumption in Second life
17
provides an ideal opportunity for consumer decision-making, which many
conventional marketing communication channels may not be able to offer.
3.6 Social Presence as a Mediator of Virtual Experience
Lee (2004) defines social presence as a “psychological state in which virtual
(para-authentic or artificial) social actors are experienced as actual social actors in
either sensory or non-sensory ways.” Lee also argues that “social presence occurs
when technology users do not notice the para-authenticity of mediated humans
and/or the artificiality of simulated nonhuman social actors.” In Second life, avatars
communicate with one another via a streamlined instant-messaging chat tool. In this
way, users can meet new people, talk to one another, and make new friends. Users
can also form various types of interest groups—from non-profit organizations to
bands of virtual gangsters—and can also inhabit many virtual social gathering
places. In Second life, therefore, users can experience a strong social presence
through avatar-based social behaviors. Klein (2003) argues that presence is found to
have a significant and positive impact on consumer persuasion, measured at the
attribute level as well as the product level. This suggests that the social environments
of Second life have a powerful ability to influence the cognitive responses of
consumers.
Virtual embodiment of media users is an important factor that can affect the
users’ feelings of presence. Gerhard, Moore, & Hobbs (2004) claim that embodied
18
conversational agents increase people’s experience of presence in virtual
environments.
3.7 Virtual Community
Virtual communities have been described as groups of people with shared
interests or goals in an electronic environment (Dennis, Pootheri, & Natarajan,
1998); as people who interact online in a sustained and repetitive manner who are
not bound by geographical location (Riding & Gefen, 2004); and as an intentional
social action derived from distinct common interests (Bagozzi & Dholakia, 2002).
This type of computer-mediated communication allows people to locate and
communicate with others who have similar interests, thereby forming and sustaining
virtual communities (Hiltz & Wellman, 1997) and creating “social aggregations that
emerge from the Net when enough people carry on those public discussions long
enough, with sufficient human feeling, to form webs of personal relationships in
cyberspace” (Rheingold, 1993).
Individuals visit virtual communities to seek opportunities for information
exchange, social support, and friendships (Ridings & Gefen, 2004). Flavián &
Guinalíu (2005) claim that 1) well-known companies are using virtual communities
to back up the distribution of their products over the Internet; and 2) virtual
communities can increase the likelihood of success in marketing via the Internet by
increasing consumer commitment and emotional ties with various brands. They also
suggest that the success of virtual communities lies in the degree of consumer
19
commitment to them. Virtual communities have the potential to become key trading
arenas; that is, virtual communities are formed via the Internet and are expected to
evolve to a strategically important e-business model. (Armstrong & Hagel, 1997;
Barnatt, 1998; Kardaras, Karakostas, & Papathanassiou, 2003). Second life offers an
environment that encourages consumers to commit themselves to products through
the virtual experience of buying them through an avatar. Relying upon interaction
with members of a virtual community such as Second life, companies will eventually
learn more about the needs of their customers. They also will strengthen their
relationships with consumers, and they will be able to customize their services
(Kardaras, Karakostas, & Papathanassiou, 2003). Therefore, selling “to” avatars and
marketing “to” avatars is one key to marketing success in virtual environments
(Hemp, 2006).
20
Chapter 4: Case Studies
4.1 Marketing Communication
Marketing communication initiatives for consumer products are the most
active corporate communication efforts in Second life, specifically for the fashion,
automotive, and information technology industries. Table 2 shows the list of
corporations that have set up virtual presences in Second life. The current thesis
presents case studies on two pioneering brands that have initiated marketing
communication in Second life: American Apparel and Scion.
Table 2. Brands in Second Life
Industry Brand
Automobiles Toyota, BMW, Mercedes Benz, Pontiac, Mazda, Nissan
IT Intel, Cisco, AMD, IBM, Sun Microsystems, Microsoft
Media Reuters, BBC, Sky News, AOL, Channel 4
Entertainment MTV, Sony BMG, Sundance
Retail Adidas, Reebok, American Apparel, Calvin Klein, Circuit City,
Sears
Telecoms Vodafone, Sony Ericcson
4.1.1 American Apparel
American Apparel, a Los Angeles-based clothing company known for its
provocative advertisements and sweatshop-free products, is a pioneer brand in
Second life. When American Apparel learned that the demographics of residents in
21
Second life matched the demographics of their target audience, they quickly jumped
into this virtual venue.
In June 2006, American Apparel opened a virtual store and became the first
real-world retailer to open shop in Second life. To maintain its brand image,
American Apparel wanted to build its virtual store to resemble its “real-world”
stores, so the company wisely hired popular Second life architect Aimee Weber to
design the store. Her 6,000-square-foot, two level virtual replica includes interior and
exterior details such as hardwood floors, signs, and track lighting. In this virtual
store, Second life residents can buy American Apparel products for their avatar. Most
of the store’s virtual clothing retails for less than $1, which translates to about 270
Linden Dollars, the currency exchanged in Second life.
Figure 6. American Apparel’s Second life store
22
The goal of American Apparel’s presence in Second life is much more than
selling virtual clothing. According to Raz Schionning, the company’s Web director,
American Apparel wanted to execute a “boundary-pushing experiment” to reach
young, tech-savvy consumers. He added that “even though Second life has been
around for three years, it's still cutting-edge, and just to be aware of it and to have
gone so far as to get involved with it means that you're a trendsetter, not a trend
follower.” (Warren, 2006)
American Apparel has kicked off several new marketing initiatives in its
virtual store. The company’s most interesting and innovative promotion is the “Be
Your Own Twin” campaign. When users buy a virtual product with their avatar from
American Apparel’s online store, they receive 15% discount on the same item in the
real world. For example, if an avatar buys a virtual Pom-Pom Beanie, the user will
receive 15%-off coupon for the purchase of a Pom-Pom Beanie at American
Apparel’s online store. In addition, the company provides a link to American
Apparel’s website so that users can easily purchase their product.
23
Figure 7. Inside American Apparel’s Second life store
Therefore, if avatar looks good in their new virtual clothes and receives
compliments on the outfit from virtual friends, this may influence users to buy the
same outfit for themselves. This virtual-consumption marketing strategy is
unprecedented, as it encourages users to become consumers through their avatars.
Previous to this, some online retailers allowed shoppers to try on products in a virtual
world before they purchased them in real life. The virtual stores in Second life,
however, are different from those online retailers in many ways. As discussed in the
previous chapter, users are socially active through their avatars in Second life, unlike
the avatars found in online retail sites. Moreover, avatars in Second life are
sophisticatedly modified, upgraded, and coordinated by their users for their second
social life. In other words, avatars in Second life are true “second egos” of
consumers. Although many virtual store initiatives have failed to really tap into the
24
Second life community because they don’t offer enough variety in terms of
merchandise and entertainment, American Apparel’s virtual-consumption “Be Your
Own Twin” campaign has been highly successful.
4.1.2 Toyota Scion
Scion is Toyota’s rapidly growing, youth-focused compact-car brand. In
2006, this unexpectedly popular automobile surpassed its 150,000-car-a-year sales
goal by 25,000 vehicles (Chon, 2006), and the company ironically decided to restrain
production volume to keep sales from going above 150,000 vehicles the following
year. Scion’s marketing strategies help to keep the brand image as special, cool, and
cutting-edge; nevertheless, the company sacrifices some of its sales.
In fact, to enhance its unique brand identity, over the past few years Scion
has reduced its traditional-media advertising. Toyota mostly focuses attention on the
brand by marketing it through experiential events, branded entertainment, and social
networking sites. However, even MySpace.com has become too mainstream for the
Scion after News Corp. bought the website. In a WSJ interview (Chon, 2006), Mark
Templin, vice president of Scion, says, “Because we no longer have to focus on
brand awareness, we can be even more edgy and more risky.” Scion focuses their
marketing campaign on a mere 10% of 142 million consumers under the age of 35,
and Toyota especially wants to reach young, trend-setting, tech-savvy individuals.
25
Figure 8. Toyota’s Second life showroom
Establishing a virtual presence in Second life was an ideal way for Toyota to
create an extraordinary venue for marketing the Scion. In November 2006, Toyota
launched “Scion City,” a gigantic virtual Scion showroom in Second life. Toyota was
the first automotive company to jump into virtual world, and the company has
launched many innovative virtual marketing strategies, which many other companies
have copied.
Second life residents are able to not only visit Scion City but they also can
test-drive various Scion models. The virtual Scions were sophisticatedly designed by
Francis Chung, who runs the famous virtual automaker Dominus Motor Company.
When avatars climb into a virtual Scion, they can view expertly rendered interior
details, such as the dashboard, steering wheel, and seats. If users like the Scion after
26
they test-drive it, they can buy a virtual Scion for their avatar for 300 Linden Dollars
(equivalent to about 1 U.S. dollar, depending on the current exchange rate).
Virtual test-driving certainly cannot compare to driving a car in real life, and
virtual automobiles are not truly necessary for Second life avatars, as these avatars
able to both teleport and fly. However, through virtual test-driving, users can interact
with the product and brand through a virtual experience, rather than just consuming
advertising, reading news articles, or visiting the company’s website.
In addition, driving a virtual Scion allows users to express their personalities
and tastes in a virtual social networking community. In effect, driving a certain
automobile isn’t much different from wearing a certain brand of jeans or having a
certain hairstyle—it’s about self-expression in an alter-ego world. In this way, virtual
consumption can generate stronger consumer interest as well as an affinity for a
product or brand, which may result in real-world purchases.
4.2 Non-Profit Organizations
Several pioneering governmental agencies, NGOs, schools, and other
educational institutions have played leading roles in terms of communication
initiatives in Second life. The current thesis will investigate two non-profit
organizations in Second life: Centers for Disease Control and Prevention (CDC) and
the American Cancer Society (ACS), both of which have launched successful
virtual-environment communication initiatives.
27
4.2.1 Centers for Disease Control and Prevention (CDC)
The Centers for Disease Control and Prevention is an agency of the U.S.
Department of Health and Human Sevices. The CDC’s main goal is to prevent and
control infectious and chronic diseases, injuries, workplace hazards, and
environmental health threats. To accomplish this, the agency has launched
comprehensive communication campaigns to provide credible health information to
the public. With the popularity of Web 2.0 tools, the CDC has attempted to establish
a presence in various new Internet media in order to reach diverse public segments
with relevant and timely health information. In addition to publishing blogs and
podcasts, in August 2006 the CDC set up a virtual office in Second life.
Figure 9. CDC’s virtual office in Second life
28
The virtual CDC program features three main components: virtual
representatives, a series of informational wall displays, and a virtual health fair. The
CDC created a virtual employee avatar named Hygeia Philo (meaning “lover of
health” in Greek) to represent its virtual office to other Second life community
members. Hygeia works at the virtual CDC site and gives reception to visitors. This
virtual employee also meets with virtual journalists for interviews, and these
journalists actually quote Hygeia Philo, not the real user behind this female avatar. In
addition, Hygeia publishes a weekly health information column in a Second life
virtual newspaper. John P. Anderton, Ph.D., manager of CDC’s Second life project
and the real-life user behind Hygeia Philo, said during a virtual interview with social
marketing expert Nedra Weinreich, “I think of working with the CDC space and
Hygeia Philo like hosting a trade show booth with a colleague. I am there to
represent CDC in the best way possible, professionally and personally…. I don't see
Hygeia Philo as an alternate John Anderson. Rather I see her more as the face of the
agency that I am working with to disseminate health information.”
The virtual CDC office also features a series of informational wall displays
that provide health information to visitors. From this virtual information wall,
visitors can jump to the CDC’s website, a web-based resource center, and CDC
podcast archives. The site also showcases a selection of historical public health
posters.
In addition, the CDC held the world’s first virtual health fair. Although the
CDC didn’t hold a large press conference—which almost all major companies and
29
organizations do to gain media and public attention—the organization’s Second life
event was covered by influential blogs and Second life media.
According to CDC website, Second life provides the CDC with the
opportunity to develop a more intimate way for people to search, find, and utilize
public health information beyond individuals merely obtaining information from a
database. Thus, Second life allows the CDC to refine what it offers through its
website and in response to public inquiries
A virtual presence in Second life also expands and deepens the CDC’s
communications portfolio, affording it the opportunity to inexpensively address the
needs and concerns of a wide, international audience. According to Anderson, to date
the CDC has spent less than $75 to execute its virtual presence campaign (Human,
2007).
4.2.2 American Cancer Society (ACS)
The American Cancer Society (ACS) is a nationwide health organization run
by community-based voluntary activities. Relay for Life is an ACS fundraising event
that originally began in May 1985. The event is held in more than 4,600
communities in the United States and in 23 countries around the world. To date,
Relay for Life has raised more than $1.5 billion to help individuals suffering from
cancer and to empower people in their fight against the disease.
In 2005, the ACS brought this charity event to Second life. In real life, during
the event individuals gather at schools, fairgrounds, or parks and take turns walking
30
or running laps. In the virtual Relay for Life, however, participants’ avatars walk or
run around well-designed virtual tracks, which are replicas of famous countries and
cities around the world, including Mexico, New York City, Paris, and Sweden. Other
Second life residents can also come to the venues and enjoy various community
events, including camp-outs, dances, virtual luminaria, and sky diving while they
donate money. The 2006 virtual Relay for Life event raised more than $41,000 and
attracted more than 1,000 participants, which vastly surpassed the event organizers'
original goal of doubling the previous year’s total of $5,869. (Krietsch, 2006).
Because the number of Second life users is growing rapidly, fund-raising activities in
Second life have a great potential to attract considerable numbers of participants and
donors. According to the Second life Relay for Life website, the ACS already
attained their goal of raising $75,000 USD for their 2007 relay even one month
before the start of the actual event. The ACS expects 2,500 individuals to participate
in the July 2007 event—more than double that of last year.
According to onPhilanthropy.com, Michael Mitchell, national vice president
and executive director of the American Cancer Society’s Futuring and Innovation
Center, said, “We are thrilled with the success of this year’s Second life Relay for
Life program. Now, more than ever, we know that a virtual community can be
engaged just as effectively as a real community to help fight cancer (Watson, 2007).
In addition, the virtual relay enables individuals who may be physically incapable of
participating in a real Relay for Life to get involved in a new way. In an interview
with Financial Times, Randal Moss, manager of the American Cancer Society’s
31
Futuring and Innovation Center, said, “There are things you can do in Second life
that you can't do in real life. We set up a sailboat course in the middle of the relay
track in 2005 and 2006. You can't do that in a real relay, so it really opens up a
tremendous unbound world.”
Second life has provided the ACS with an extraordinary communication
channel. Establishing a virtual presence has allowed the organization to reach out to
a new demographic, thus expanding their mission.
The main reason behind the success of the American Cancer Society in a
virtual environment is the organization’s ability to adapt to Second life communities.
In addition to maintaining a non-commercial nature for Relay for Life and its pursuit
of public welfare, the ACS successfully kept the event community-based. Relay for
Life in Second life is run by volunteers whose expertise is in virtual track design, site
design, entertainment, event planning, promotion, and scripting. Thus, the American
Cancer Society operates Relay for Life as a low-budget event that maintains a
community focus.
In his interview with Financial Times, Mr. Moss added, “Second life is a
community first and foremost, and you enter it as you would enter and engage any
community. You can't walk up to the mountain, plant your flag and declare you're
here. It doesn't work like that. You need to find existing supporters and people who
care about your cause and then work with them.”
32
Overall, the Relay for Life event not only demonstrates that charity events
can be successful in virtual environments but also provides a role model for the
communication channels of NGOs.
33
Chapter 5. Conclusion
5.1 Findings
Early corporate communication initiatives in Second Life were mostly very
simple and short-term virtual presences whose goal was to achieve “the first of its
kind” publicity. As the media has publicized the entrance of credible brands,
organizations, and conglomerates to this exciting virtual world, more and more
Internet users have come to know about Second Life. Truly, Second Life is no longer
just a world for extremely tech-savvy individuals, as its registered users total more
than seven million. As media coverage and public awareness of Second Life has
increased, more and more companies and organizations have joined this virtual
world.
There is no consensus on whether Second Life is an effective communication
tool for building a positive reputation of a brand or organization. In fact, 72% of
surveyed Second Life residents reported that they were disappointed with the
activities of companies in Second Life. More than a third of them were completed
unaware of any branded presence, and 42% consider the virtual presence of
companies a short-term trend, lacking companies’ durable commitment. Just 7% of
respondents stated that Second Life has a positive influence on brand image and their
future buying behavior (Komjunity, 2007). In contrast, according to the report “Real
Life Brands in Second life,” released by Market Truths, 49% of Second Life residents
think that the presence of real life brands can have positive effects; about a third have
34
a neutral opinion on the subject (Market Truths, 2007). Despite these differing
reports, it is expected that more and more companies and organizations will establish
their presence in virtual worlds such as Second Life.
For an organization to simply set up a virtual presence in Second Life is no
longer big news; thus, companies must be much more innovative with their virtual
marketing strategies than ever before. As understanding of virtual environments and
virtual communities increases, organizations’ communication strategies in Second
Life are becoming more and more sophisticated.
Based on my nine-month active participation in Second Life, I’ve observed
that engagement with Second Life residents is the key to the success of corporate
communication in the virtual world. For companies to fully engage with Second Life
residents, I suggest following communication strategies.
First, corporate communication in Second Life should be carefully designed
from the perspective of virtual communities. Simply building a virtual presence with
a tremendous budget may be perceived as nothing but an intrusion, which might be
harmful to reputation of the brand and organization.
It is always important to keep in mind that residents of Second Life form
strong bonds with their communities. Corporate communications are welcomed
when a company is making an effort for the sake of community welfare and is ready
to support the community. Designing community-centric communication initiatives
that make actual contributions to particular communities is the best approach.
35
It is also important to make corporate communication activities visible. Some
corporate virtual presences are nearly impossible to find through Second Life’s
search engine. In addition, Second Life residents gain information through influential
“in-world” journalists and bloggers. Therefore, companies should be keenly aware of
the importance of these opinion leaders while promoting their corporate
communication initiatives.
Second, “Don’t sell them. Play with them” is an important rule for companies
establishing a presence in Second Life. As residents in Second Life continue to look
for something new and entertaining, the virtual presence of companies with
entertaining content will be the most successful. Likewise, it is important for
companies to develop new content regularly and keep it fresh, thus attracting
residents to return to corporate communities and visit them regularly.
5.2 Suggestions for Future Research
There are several limitations of the current thesis. The current thesis mainly
focuses on Second Life, as it is the most active arena in which corporate
communication takes place among existing virtual environments. However, this
study is limited due to insufficient resources and current data, especially since
Second Life is in its infancy and there is little available empirical research. Although
consulting firms have released research data based on surveys and focus group
interviews, those studies mainly focus on brand marketing. The first research project
I will be working on in my doctoral program will empirically examine the effects of
36
corporate communication in Second Life and will specifically focus on non-profit
organizations and NGOs.
37
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Asset Metadata

Creator Moon, Jang Ho (author)

Core Title The new ways of corporate communication in virtual environments: case studies of Second Life

School Annenberg School for Communication

Degree Master of Arts

Degree Program Strategic Public Relations

Publication Date 07/12/2007

Defense Date 07/02/2007

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag corporate communication,OAI-PMH Harvest,second life,virtual environment

Language English

Advisor Lee, Kwan Min (committee chair), Campbell, Shannon (committee member), Floto, Jennifer (committee member)

Creator Email jangmoon@usc.edu

Permanent Link (DOI) https://doi.org/10.25549/usctheses-m613

Unique identifier UC1435372

Identifier etd-Moon-20070712 (filename),usctheses-m40 (legacy collection record id),usctheses-c127-516383 (legacy record id),usctheses-m613 (legacy record id)

Legacy Identifier etd-Moon-20070712.pdf

Dmrecord 516383

Document Type Thesis

Rights Moon, Jang Ho

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Repository Name Libraries, University of Southern California

Repository Location Los Angeles, California

Repository Email cisadmin@lib.usc.edu