All Aboard the Hype Machine

It appears that virtual economies aren't faring much better than their real counterparts. That's the impression I get at least, after reading a few articles in recent days concerning the demise of Second Life. Apparently, the online virtual world -- complete with its own monetary system and exchange rate -- hasn't lived up to its promise.AdWeek's Brian Morrissey writes: --- Second Life rode the Silicon Valley hype cycle. It was lionized as the hot Web company of 2006, plastered on the cover of Businessweek, with brands like Adidas, American Apparel and Dell rushing in to set up outposts. Then, just as quickly, Second Life became passé and shorthand for over-hyped technology. ---

A B-to-B Online story adds: --- You don't hear much about Second Life today. It's still around, but most of its commercial islands have been shut down. Second Life's interface is too complex and its computing demands too voracious to win the loyalty of business professionals. While virtual worlds have enjoyed some success as a trade show alternative, they have quickly lost their luster as a means to allow the transacting of real-world business. ---

Second Life is a topic that I've written about relatively frequently at I&T, as a few insurance carriers explored it for potential marketing opportunities. In 2007, Unitrin Direct set up a virtual building that contains kiosks that direct users to the company's online quoting system. In 2008, Aviva USA had slightly more ambitious plans, developing an entire Second Life island aimed at the producer community.

Regardless of Second Life's perceived or real hardships these days, I'm confident that neither insurer regrets its decision to delve into the virtual space.

Carriers such as Unitrin Direct and Aviva USA have very little to lose in Second Life. Executives from both companies have told me that their projects required minimal investment. For Aviva, the project represented less than once percent of the West Des Moines-based carrier's sales and distribution budget. Unitrin Direct's director of marketing, Jeff Silver reported similar numbers and told me that Second Life land-use fees amount to about $15 per month.

Also, there's nothing preventing Second Life from taking-off sometime down the road. As the B-to-B story mentioned, Second Life's primary weaknesses are its complexity and its computing demands. I know these weaknesses well, as loading Second Life causes my home computer to immediately crash. Perhaps as popular home computing options improve though, Second Life will shed a key adoption barrier. The change could be similar to that of Twitter. The micro-blogging site didn't truly take-off until smart phones reached a critical mass.

Speaking of Twitter, the B-to-B article suggests that it has replaced Second Life "on the hot list." From B-to-B: --- Twitter is so simple that it can be used on a cell phone or BlackBerry. It takes minutes to set up, requires no local software and makes users instantly productive. It is rapidly emerging as the most important new social media platform of the last two years. ---

It's silly to me that the B-to-B article seems to take advantage of hindsight to criticize the once-overhyped Second Life on one hand, and then praises the currently-hyped Twitter with the other. Maybe that's because I'm just not completely sold on Twitter.

As a journalist, I can see how Twitter might help connect me with readers and potential sources (follow me please!: nconz), but as an Internet citizen, I just don't think there are a lot of interesting things you can say or thoughts you can develop in 140-character bursts. Twitter feels like another online productivity drain and one that just isn't nearly as fun or interesting as Facebook (which lets users share Twitter-like updates), a favorite blog or something like, say, fantasy baseball. In other words, I prefer to waste my time in other ways.

But that's just my personal opinion. Certainly, the tool has some potential business uses. As an I&T editor, I'm interested to see how insurers will leverage Twitter to reach customers or improve customer service, etc. As we saw with Second Life, it costs an organization very little to explore social media spaces and the rewards -- if a particular online social media really hits it big -- are potentially huge.

As a result, carrier execs might want to use a different kind of threshold when deciding whether to green light projects in mediums such as Second Life, Twitter and whatever comes next-- even if they doubt it has staying power. When the risk-reward ratio is so favorable (and Twitter requires even less investment than Second Life), possible failure should no longer be a deterrent.How should insurers approach (potentially over-hyped) social media like Second Life and Twitter.