Debunking 5 Business Myths about Second Life

NBA IslandRecently Forbes featured a widely-cited article (reg. req.) on marketing in Second Life that was so spectacularly incorrect, it inspired me to whip up this reference guide, as the errors there keep cropping up elsewhere. As someone who worked for Linden Lab, consults on and is writing a book about Second Life, I have an obvious personal and professional interest in the topic. But what follows isn’t metaverse boosterism; it may very well be that Second Life is over-hyped or ill-conceived for business purposes. Even if so, however, it’s not due to the five provably bogus claims. [digg=]

Myth 1: Second Life is Huge– or Second Life is Small

IBM Island in SLThese are two misapprehensions based on the same mistake: not carefully checking the very latest demographic figures. Reporters continue citing the “Total Residents” (currently 7.9 million) listed on the homepage as if they’re active unique users. But that number includes defunct and secondary accounts, among other detritus. Alternately, some reporters glance at the front page’s “Online Now” stat– currently around 40-48,000 at peak times– and assume that’s a more accurate tally of total active users. (Forbes’ article manages to make both errors, with out-of-date statistics, no less.) A better reference is posted monthly by the company’s demographer on their blog, and includes an industry standard of unique monthly active users. As of June, that number was closer to 500,000: about medium-sized for an online world.

Myth 2: Nobody visits SL Marketing Sites

While it’s true that “homegrown” content generates far more enthusiasm, traffic to the top real world promotional sites is actually competitive with other forms of Internet advertising. During June, about 400,000 Residents logged in each week. In a typical seven day span that month, according to my Second Life blog’s demographer, the five most popular locales generated anywhere from roughly 1200 to 10,000 visits. (The top ten earned over total 40,000 visits.) Therefore, each of the top five sites garnered a .8 to 2% visit rate. Typical click through for a traditional banner ad on the Web is generally estimated at .5 to 1%. (And that’s not even counting T-Mobile, which is actually paying SL users to visit their popular island party spot.)

Myth 3: Real World Advertisers are Linden Lab’s Main Revenue Source

Not by a long shot. About a hundred real world for-profit companies maintain an SL island, most for marketing purposes; some own several islands, so let’s be generous and estimate 500 advertising-related islands. By last month, however, Linden had sold 8336 islands, most to private individuals. So corporate advertising is roughly 6 percent of the existing isles– hardly a central cash flow. (That’s not even counting the vast acreage of Linden-controlled continents, which have little or no corporate leaseholders.)

Myth 4: Corporate Sites are Helpless in the face of Protesters and Sabotage

Much as a conflict between idealists and exploitative capitalists in the metaverse would be an exciting story, that hasn’t observably happened to mass effect since 2004, when the world was vastly smaller. Lacking evidence of such a clash, mainstream journalists latch onto reports that corporate sites were recently attacked by something called “the Second Life Liberation Army”– without realizing that the erstwhile “army” was largely just a whimsical roleplaying group of around a hundred members, not anti-corporate per se, and most of all, not causing any permanent damage.

Related to this, most “sabotage”, such as it is, involves impermanent special effects which could have been prevented entirely, had the landowners used the available land management controls which regulate unauthorized content creation on their property. (That includes notorious cases like flying penises besieging CNET’s office, or the defacing of Senator Edwards’ unofficial SL campaign HQ.) Some reporters miss this detail. That’s like a real world shopkeeper leaving his store unwatched and unlocked with the alarm disabled, then after the place gets trashed and looted overnight, subsequent news reports blame his landlord. Sometimes sabotage is even asserted where there is none– as with widely disseminated reports of a “nuke” that supposedly destroyed Australia’s ABC island– which later turned out to be a non-malign server crash.

Myth 5: It’s Mostly a Sex Haven Full of Weirdos

Another myth that persists despite dearth of evidence. (But then, that didn’t stop people from claiming the exact same thing about the wider Internet, during its first commercial rise.) In terms of land mass, Linden Lab reports that just 18% of the world has been designated to have “Mature” content; explicit sexual activity is relegated to a subset of that percentage.

As for “weirdo”, if the Web has taught us anything, that’s a vastly subjective term. Most of the animus in SL’s case, however, is directed against “furries”, Residents who roleplay as anthropomorphic cartoon characters. According to internal estimates by a veteran leader of the community, however, the SL furry population is now about 30,000— just 6% of the current active user base, or 1.6% of those who’ve been in-world over the last two months. Oddly enough, this particular myth is mostly promulgated by gamers and the gaming press. Which I have to say, is a distinctly ironic kind of geek bigotry. (i.e., “Furries are creepy– unlike me, I’m a level 34 Night Elf Druid.”)

Again, none of this is to say Second Life is the most ideal virtual world platform for business, certainly not for all purposes. For one thing, it’s not anywhere near the largest online world to allow outside marketing (the kid-oriented Habbo Hotel and Gaia Online, to name just two, are larger.) And Time Magazine’s recent diss of SL, for example, is mostly fair (if arguably short-sighted.) Ultimately, my real bias is against careless reporting from respected publications which consider Second Life worthy of coverage– but somehow, don’t feel obliged to apply traditional standards of accuracy, when doing so.

Update, 7/16: The Los Angeles Times, by the way, just rehashed 4 out of 5 of the above myths.