The SL Agency

After being (somewhat forcefully) immersed in the world of Second Life, I’ve come to appreciate the huge potential that virtual worlds hold. This is why I focused my line of questioning on that very subject when I interviewed Lou Mourelatos, Vice President of Business Development at The SL Agency. Providing innovative marketing/advertising solutions, The SL Agency is capitalizing on the increasing interest in virtual worlds, working with many big name corporations and NGOs.

Through the interview, Lou has provided surprisingly thorough insight into his business, and the business of virtual worlds in general. Beyond this, he gave detailed information on the accounting procedures he employs. The questions I asked are as follows:

1. What first led you to pursue a business related to Second Life?

TheSLAgency understands the potential for Virtual Worlds and how they bridge geography, enable unique experiences, and expand the imagination of its participants. That being said, we knew we needed to be in this space as the future of ‘digital dwelling’ looks more and more promising. TheSLAgency looked at several virtual worlds and found Second Life to contain a nice balance of ease-of-use verses functionality / audience. Understanding that Second Life, from a marketer’s perspective, should be used as a tool…and not a pool:

2. What are some of the companies you’ve worked with? What type of services did you provide?

TheSLAgency has successfully executed various types of marketing services for The Ontario Public Service, Nestle Nesquik, The World Bank/IFC, and MIRA Publishing to name a few. Services range from 3 to 6 month branding/messaging programs to live conferences events, recruitment drives, brand interaction, author readings/discussion, display media and virtual brand ambassador programs.

3. Why should companies consider expanding into virtual worlds?

The common denominator for all virtual worlds is the memorable & emotional experience they provide. When you can engage a consumer for upwards of 30 minutes, provide an interesting (read non-boring) training vehicle, or cost-effectively bridge geographic bounds via Virtual Meetings; it is difficult to overlook the value that VW could provide.

4. What advantages are there in marketing within virtual worlds, compared to more traditional means? What are the disadvantages?

Having a footprint in a virtual world allows for a unique brand experience and provides that emotional connection – this is an already establish goal of traditional advertising. A brand can engage their message target much more effectively and creatively via 3D content that is dynamic and innovative. Doing so builds brand affinity. From the business / corporate perspective; Virtual Worlds can enable branch offices from around the globe to meet, chat, and visualize ideas without paying hundreds of thousands in hotel & travel arrangements.

One may look at the non-standard metrics as a disadvantage to Virtual Worlds. Second Life for instance is not unlike the world-wide-web in 1995. It’s still new, adopted “only” by a few million users (compared to overall internet users) and still has many milestones to reach before it’s completely like the internet we know today. Content development in almost any virtual world is typically propriety, although in Second Life, content can be developed by anyone who learns the basics of the built-in toolset. This slight learning curve, coupled with any lack of “community management” can leave your consumer-targeted Second Life space devoid of visitors. This is what many 2006/2007 brand entrants into SL fell victim to: a poor understanding of the community, it’s wants/needs, and dreams.

5. What are the chief problems, if any, that you encounter when pitching the idea of marketing in Second Life (specifically to big name businesses)?

Some businesses fail to make the connection and see how Second Life can forward their message / brand experience. We haven’t found this to be unique to large or small businesses. A similar song has been played when CMO’s and VP’s were being pitched to budget a public website. TheSLAgency believes we are at that point again where innovation tentatively hangs up in a “why do we need this” meeting. Surprisingly enough, most businesses are intrigued, and excited about the value Virtual Worlds can bring to their brand; however, some are overly cautious, while others are willing but fail to do the proper planning.

6. Do you find that it’s becoming easier to make the case for business in virtual worlds?

There has been a surge of interest in finding & implementing business solutions within a virtual world such as Second Life. We say ‘finding’ as each approach to leveraging virtual worlds for a goal should be done analytically and carefully planned out. No solution is cookie cutter and truly visionary corporate representatives understand this.

7. What is the future of marketing in Second Life?

We see an heavy push by the business world to be involved in Second Life . Recruitment and Training are the top reasons why business-centric (non-consumer) companies inquire and work with TheSLAgency.

8. What do you see in the future of virtual worlds in general?

While it is difficult to see the future; we do see a inevitable expansion of Virtual Worlds into everyday life. This “mainstreaming” will come about when the general populace overcomes the stigma that was first associated with the internet. E.g. being “plugged in” to a virtual world.

9. Are there any other virtual worlds you’re looking at for your business? Any that interest you otherwise?

While our developers have been prototyping in several other virtual worlds; we enjoy working with Second Life due to its flexible functionality.

10. Finally, what method of accounting do you use? (Accrual, cash-basis, or “I don’t know – ask my accountant”). How do you account/keep records for transactions?

A single point of “cash” is utilized and budgeted out to the required departments. Since this leg of our business is done primarily in a virtual world, we primarily use the linden dollar to pay all but high-level employees and fund development projects when not done in-house.

Relatively speaking, accounting of SL Transactions is rather easy. Each month SL enables you to download a record of all transactions. Mind you, some transaction sheets can be thousands of entries long and require a fair amount of man-hours to process. A service-based QuickBooks template, as well as a basic understanding of spreadsheet software is really all you need.