CorpComms Magazine

Sounds unlikely? Maybe, if you stick to doing business in the real world. But this is just another occupational hazard for the increasing number of companies setting up a presence in virtual world Second Life.

'We rented an office from a nice chap, but then a casino moved in next door and a lot of dubious people started coming in,' recalls Peter Dunkley, whose business Depo Consulting suffered from Pamplemousse's unwelcome attentions. 'If we had had a client there I wouldn't have wanted them to see him. But you can zap people out.'

Brave new world

For many people, doing business in an internet game seems even more alien than using video-sharing site YouTube to promote a brand. For those companies prepared to deal with thong-wearing Italians and dubious web visitors, however, Second Life is rapidly becoming the must-have new office location. A quick trip into its virtual business districts reveals that a surprising number of big businesses have already jumped on the bandwagon. Microsoft and other technology companies are to be expected, but companies as diverse as Coca-Cola, ING Bank and the Corporation of London are also exploring Second Life possibilities. The Jesuits are considering setting up a Second Life mission, and Reuters has a full-time journalist posting dispatches there.

Because having a presence in the game is mostly a brandbuilding and marketing exercise, it's not surprising so many PR and communications firms have got involved, too. 'There are huge opportunities, but people haven't really grasped the full potential yet,' says Dunkley, whose consultancy advises companies on how to exploit the internet.

For those who do not spend their time propelling miniature versions of themselves through make-believe locations, Second Life deserves an explanation. It is a 3-D virtual world, owned by US company Linden Lab, and it is entirely built and owned by its users, known as residents, of whom there are now almost 9 mn.

Residents are encouraged to use the world to be creative. It is free to log in, and residents adopt an appearance, known as an avatar, which looks exactly as they desire. Male residents, for example, can have a female avatar appearance, while petite women can, if they wish, live out their fantasy as a Pamela Anderson look-alike. The software to create avatars can be downloaded for free.

The avatar can roam the world, talking, listening and - crucially - spending money. Known as Linden dollars, this money can be bought at currency exchanges using real-life American dollars. Second Life is now touted as the world's fastest-growing economy, and those involved are making millions of dollars - so much, in fact, that the Inland Revenue is currently looking into the situation.

 Residents can buy land in Second Life - plots over 512m2 incur additional levies - or rent offices or homes, for which they can buy furniture and other goods. They can even pay to drink virtual drinks and have virtual haircuts.

For large companies, though, it is the chance to communicate with customers that has attracted them into the game. 'We know consumers in Second Life have high incomes and are well educated - they're obviously early adopters of technology,' explains Reuben Steiger, head of PR consultancy Millions of Us. 'These are desirable and elusive audiences, so marketers and communicators looking to engage with them are moving into Second Life.'

Millions of Us created the first virtual car dealership for Toyota, where customers can customise Scion cars to fit their virtual personalities. The company now counts a third of the Fortune 500 top US companies among its customers.

'It will be important for all brands to interact with consumers in new media like virtual worlds,' says Steiger. 'Some firms recognize that it's essential for them to get in early.'

What's in it for you?

Marketing and PR companies are some of the more obvious early adopters of Second Life, with companies like Millions of Us and technology PR agency Text 100 operating offices in the virtual world. But even these trailblazers admit they still aren't sure exactly how much potential Second Life has, or what it will ultimately offer to their businesses.

'The decision to move into Second Life was partly a desire to learn more about how social media are changing the way we communicate,' explains Text 100's UK and Ireland managing director Nick Giles.

Text 100's clients include technology giant IBM and electronics company Philips. IBM already holds meetings in the virtual world, inviting delegates to bring their avatars to sit in a huge hall specially built for virtual conferences and even introducing a dress code for the purpose, asking staff to ensure the 'appropriateness of your avatar's appearance when you are meeting with IBM clients'.

Recently, Text 100 helped the company build a virtual Wimbledon in Second Life, where the tennis tournament was blanketed with IBM branding and unaffected by the miserable British summer.

Philips uses Second Life to interact with its customers and get feedback on products. 'We help our clients navigate through the new phenomenon,' Giles says. 'Second Life is part of social media, which we think is a very significant thing.' Text 100 sees the virtual world as a natural extension of other communication tools that started out on the fringe and have become vital for successful firms to understand, such as blogs and networking sites like Facebook.

Dunkley says Second Life is part of a phenomenon called Web 3.0, which all companies will eventually have to address. 'Everything on there is a bit primitive at the moment,' he admits, 'Companies are still trying to get their heads around Web 2.0.'

Making contact

Web 2.0 is a way of describing social networking sites, like Facebook and MySpace, which have already taken the internet by storm. Unlike these sites, however, virtual worlds like Second Life allow people to walk up to each other and interact 'face to face'.

Even if you can't tell whether the six-foot thong wearing transvestite you are speaking to is hairy, fat and five foot two in real life, Dunkley says this interaction with Second Life citizens is important for companies. 'Enterprising businesses will engage with the local communities,' he says, citing Mercedes-Benz and Pontiac as two companies with an excellent Second Life strategy: they allow ordinary Second Life residents to interact with the brands - driving the cars and customising them.

But Dunkley says it's vital that firms ask themselves what they are trying to achieve by being part of Second Life. 'They must make a commitment to man their buildings because an empty building is boring,' he says. 'Second Life has a culture, too, so don't rub people's noses in what you're doing.'

ING, the Dutch bank, is one company that has taken the plunge and worked hard on its Second Life presence. The bank opened My Virtual Holland, a celebration of all things Dutch, in Second Life. 'We experimented with just opening an office, but then realised it was vital to attract as much traffic as possible,' explains spokesperson Nanne Bos. 'To be successful on Second Life you have to have something completely different in terms of concept.'

My Virtual Holland has joint projects with an art college and has put ING's entire art collection onto Second Life. 'It has been a success, and we get a few visitors, but still not enough to start a serious business,' Bos says. 'In the long run we can market our real products to people in Second Life; there might be opportunities to deliver banking services to them, but it is still in its early stages.'

Bos likens Second Life's current state to the hype around the internet at the beginning, when the web created an awful lot of noise but few true business opportunities: even a successful Second Life business like ING's is attracting only 100 visitors a week.

Anthony Caulfield, whose promotion business Phoenix Media creates offices in Second Life for clients, says there is a real danger uninformed companies can end up spending a lot of money that will reap no benefit. 'Lots of companies have spent a great deal of money on Second Life - up to $200,000 (over £100,000) for a very big firm - but they can end up creating ghost towns nobody ever visits,' he warns.

Instead, Caulfield counsels caution. 'Coca-Cola started with a very small virtual presence: a vending machine where you can buy a Coke and walk around and drink it,' he notes. 'That is attracting a lot of people and spreading the brand. Although people go to Second Life for fun there is lots here for business, but to avoid being a ghost town you need tricks and reasons for people to visit.'

He cites the example of Reebok, which initially spent a lot of money on the environment in Second Life, but did not attract much traffic until it came up with a gimmick. Visitors can now design customised trainers in Second Life and then buy them in real life; this has driven consumers to Reebok's Second Life home.

Live long and prosper

Of course, one problem with persuading companies they need to explore games like Second Life is the geeky image they carry. 'It can be useful, even though it sounds a bit sad and gimmicky,' admits Caulfield.

Giles warns that there is 'a level of cynicism' about Second Life, despite the publicity it can generate for companies that get involved. 'There is a feeling everyone is jumping on a bandwagon,' he cautions.

As the technology is so new, it is hard to even predict whether Second Life is here to stay, although most experts are confident that the face-to-face business model used in virtual worlds will be what future business users of the internet adopt. 'The new players who have come to the fore are all social sites - and that is definitely here to stay, whichever businesses come and go,' Giles says. He also points out that Second Life is just one virtual world out there (although it is the one most accessible to business).

Steiger advises any company that is interested to do its homework, and then plunge into Second Life and reap the rewards in terms of enhanced customer relationships. 'I think virtual worlds will bring a human touch back to corporate interactions with consumers and employees, as surprising as that may sound,' he says. 'Engaging people in a virtual world is a warmer, more personal experience than via email or a website. It's less about a transaction than about an experience and a narrative - and when companies get this right, they can create very powerful relationships.'

It may be early days, but Second Life really can have a first-class effect on your business communication. If you meet a six-foot Italian called Pamplemousse, however, it's best to have your zapping finger at the ready.

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