So how do you do it and why would you do such a thing?

What are the main things companies should consider before getting involved?

If you are not authentic and do not offer anything to the community, you are likely to be ignored, at best. But those firms who commit to a long-term presence in Second Life have an opportunity to interact with their community in new and innovative ways.

We recommend that people join, learn and really feel things out before jumping in.

Is advergaming all about brand? How can advertisers measure response?

It is all about the brand at this point. Second Life provides a way for brands to reach out and connect with their audience in new and different ways.

Regardless of how you choose to measure this interaction, it would ultimately be qualitative over quantitative.

Is there a danger that users could be put off if Second Life becomes too commercial?

We equate more residents and companies coming in-world with a richer experience for everyone. Of course, this will require balancing the concerns of early adopters and other niche demographics, with that of the population as a whole.

Ultimately, the more people that choose to come in-world, the more opportunities it will create for all residents. We think residents recognise this and will accommodate an increasing variety of presences in-world. At present there is such a wealth of activity that participation in any commercial aspect is completely voluntary.

Personally, I’m not entirely sold on Second Life, though I am fascinated by the discussion. If I want to play computer games, then I’ll play a computer game. With 1.2mn members, a massive 35% of whom signed up in the last month, it’s nowhere near the size of World of Warcraft (8mn) or even Guild Wars (2mn). However, the lack of elves, dwarven warhammers and the like means that it’s more socially acceptable for grown-up marketing professionals to express an interest. I’d argue that this makes the level of coverage a little artificial compared to its real-life impact.

As with most social media engagement, as Catherine says, the metrics of ROI are pretty messy. It “provides a way for brands to reach out and connect with their audience in new and different ways” that can only be measured qualitatively. The trouble is that most businesses can’t do everything. How will they be able to measure the advantages of a SL presence against other forms of activity? Also, having a building or an island in SL kind of requires one or more people to be there. Empty shops don’t, to me, suggest a company that’s “engaged”. So that’s three FTEs if you want a full-time presence… for results that you won’t be able to quantify for ages. Good luck getting that past the grumpy FD.

* I know the headline has nothing to do with the story. Sorry. But I wanted to use it anyway.

Update: There’s a good introduction to the business side of Second Life in The Economist today. The writer profiles the work of Reuben Steiger, boss of Millions of Us, whose online clients include Sun Microsystems and Toyota: “A good campaign in Second Life costs about $200,000 dollars, he reckons, of which only a tiny part is property leases and most goes to paying the talented designers to create great virtual stuff.”

Professor Ruth Aylett, Professor of Computing Science at Edinburgh’s Heriot-Watt University believes that with young people increasingly familiar with computer games and story-telling through virtual reality worlds, the opportunity to interact with characters who are ‘virtually’ facing the same sort of problems that the pupils might be suffering in their everyday lives could be immensely beneficial.

“If you’re a young person facing some sort of bullying on a regular basis the problem can seem too big, too overwhelming, to tackle. What we will be developing is a virtual world where the user can interface directly with a synthetic character who is also a bullying victim. That bullying scenario is played out on the screen then the user can interface with the synthetic character, discuss what has happened and make choices about how the character might like to react in future. They can then watch the next scenario and see what sort of impact that advice has in how things turn out. That way, instead of what feels like a huge problem in their own lives the decisions are broken down into bite-sized chunks affecting a virtual character.“

Any attempt to tackle bullying is clearly a good thing, and the initial results have been promising: “children like the interaction with the virtual characters and find the content highly interesting and believable”. The main usability issue has apparently been the quality of the graphics. It’s an interesting approach, though bullies themselves appear to be keeping abreast of the latest technology. On March 31, a four-year study was presented to the British Psychological Society, which revealed that nearly 15% of 11,227 children had been victims of cyber-bullying.

Next month Starwood Hotels is going to preview a new hotel brand called Aloft inside the Second Life virtual world. The physical hotels will open to the public in 2008. They have launched a blog that shows how the virtual hotel is being created.

In response to a comment, I heard from Marc Schiller at Electric Artists, the company running the electronic side of the construction project. He hopes that this virtual town planning will allow the hotel’s architects to learn about any problems with their buildings before they are built:

We’re interested in seeing how people interact in the different areas of the hotel in the virtual world to see if there are learnings that can be used when building the real world hotel. If it turns out that there are, then this could indeed change the way architects and designers develop commercial property. By letting in “virtual guests”, we will, hopefully, learn what works and what doesn’t work. We’ll keep you posted on how it goes!

It’s a great idea. I’d love to see this as part of a trend to testing out public architecture — or even stuff as basic as home extensions — online in places where the public actually go. If virtual visitors get the chance to say “This is really ugly” , “My shop next door has been driven out of business because people can’t see me” or “I’m in a wheelchair, I can’t get in”, then it increases the chances of not making silly mistakes.