Second Life, the multi-user virtual environment so popular lately with bloggers and newscasters (and even Law & Order), is a potentially viable arena for marketing, researching, training, and community building for both business and education. Its user numbers grow on a consistent basis and it boasts presences from some of the world’s biggest industries but there’s still one big looming question…How do you calculate the return on investment when you create a presence in Second Life? Here’s a breakdown of the big reasons to get into Second Life and some tips on figuring out the ROI for each:

1.  Understanding tomorrow’ s technology today: Some say that Second Life heralds the coming web 3D revolution. Whether it’s Second Life or another platform, we know that social networks and flat websites are morphing into something new. Second Life (and the platforms that will follow) offer social networking + teleconferencing + collaborative work environments +…..well you get the point. Exploring in Second Life is a relatively inexpensive way to explore future technologies and face tomorrow’s difficult technology decisions in a relatively low-risk atmosphere.

ROI example: How much does it cost to be behind your competitors? How much does it cost to make a mistake in a technology investment (hardware, software, training, morale and confusion)?

2. Demographics research: If you want to reach a demographic of educated, early adopters in their late 20s to mid 30s Second Life is a great place to be. Focus groups are easy to facilitate and product/service development can be inexpensive when compared to models outside the virtual world. If you don’t believe me take a cruise by Welfare Island in Second Life where people stand in line and participate in surveys for very little money.

ROI example: What incentives do you have to pay for to engage people in focus groups? How does that expense compare to the equivalent motivator in SL? What expenses do you incur in overhead and materials when you conduct product research that would be eliminated in SL? Room rental? Travel costs?

3. Saving on Travel budgets: How much did your company spend last year bringing people together for training, company meetings and other events? I bet if you add up the costs of one event you’d have more than enough to develop a Second Life space that could not only host the same events but would be available 24/7 to your employees for other impromptu meetings.

ROI example: Ten people for training = flight + hotel + meeting room + meals = A lot! An island in SL probably costs less and will cover as many meetings as you want to host.

4. Making better use of investments and relationships: Many universities invest chunks of money to bring great speakers to campus and though the guest might be knowledgeable and noteworthy, students just don’t pile into the auditorium to take advantage of the money the university has already spent to bring these great folks to campus. Why not extend your possible audience into the virtual world and expand the number of people your investment can reach? Yes, they may not be students or even alumni who attend in SL but if people from the SL community attend you’re getting free marketing for your university/company. You’ve already paid for the event, after all. Why not get the most for your money?

ROI example: Let’s say you pay a well known sales trainer to come talk to your employees. You pay the trainer $1500 for the day and he/she speaks to 20 employees. That’s $75 a head plus lunch, a meeting room, etc. Extend the same session into SL and you can add up to 40 more people who might be on the road or off site and suddenly your cost per head goes down to $25 a head!

5. Internal and external community building: Your best advertisements are happy customers so why not get them together and create a community of happy people who just love to talk about how great your product/service/university is? Well, if you want them to meet you have to give them a space and a reason. This is easily done in Second Life and increasingly tough to do in the real world.

ROI example: How much are you spending on newsletters, mailers, and other forms of media that get ignored and thrown away? Spend the same amount of your budget on a SL presence and get the same exposure plus interactivity, community building, and a little bit of press. Never mind the “cool factor.”

Second Life isn’t a viable solution for every business but the same decision process your company went through 15 years ago when you decided to build (or not build) a website should be undertaken to decide whether the use of this new technology is right for you.

Want to know more? Email Sarah “Intellagirl” Robbins, Media Sauce’s Director of Emerging Technologies at sarah dot robbins at mediasauce.com

This entry was posted on Wednesday, October 3rd, 2007 at 11:21 am and is filed under marketing, second life, tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.