Virtual Worlds Forum

I speculated in my post on the launch of Lively that Google’s prime motivation for launching its virtual world is likely to be a desire to make advertising work on the platform. It would be utterly incongruous with the business models of other Google products if it attempted to pursue the ‘freemium’ model of plays such as Second Life. Further, it must be a strong possibility that Google pushes some heavy innovation in a market which has, arguably, yet to take off, or at the very least come anywhere close to reaching its potential.

Google’s thinking on what is important with advertising can, I think, be boiled down to three key aspects: a high degree of targeting, automation and revenue sharing. None of these is unique to Google, but their application to virtual worlds could create a real shift in the way advertising is done.

At the moment, targeting of adverts, or perhaps more appropriately brands, in virtual worlds is not at all widespread. It may be that this will not be such an important part of advertising in virtual worlds given the obvious difficulties in how it might work: would objects in the same virtual world differ from user to user as Google somehow calculated relevancy? More likely, I think, Google would allow brands to create their own ‘rooms’ within Lively, and then find a way to promote those rooms more heavily to those users most likely to respond positively, possibly ultimately through a 3D interface, rather than the current HTML directory.

Automation has been a key factor in the success of AdWords: the bidding system ensures the most efficient price for each slot, and complex algorithms determine when and where the ads are shown. Again, lessons from this may not be transferable into virtual worlds. It is far harder for a brand to build a 3D presence than to enter the few words needed to place an AdWords advert with Google. However, it seems highly likely that Google will try to find a way to lower the barriers to entry to virtual world advertising – it has always been aware of the importance of long tail advertising, and will be very keen to try and make that work in its new market. This may be done through a better design interface, or through exploring other forms of in-world advertising which require less design work (such as an embedded video); what seems certain, however, is that it will be a priority for Google.

It is revenue sharing which perhaps offers the greatest scope for shake-up of the way advertising works in the metaverse. AdSense allowed Google to vastly increase its inventory, and it is likely to attempt to do the same with Lively. Might I be paid, for example, to clothe my avatar with Nike clothing? At the moment virtual world users are more likely to expect to buy items from brands, and being paid for the same thing would certainly be a shakeup of the business models.