Earning my MBA from The Wharton School in '99 was a transformational experience for me.  A big part of that experience were graduates returning to campus to speak to my class.  So I have returned to the school, once to twice per year (in more recent years, twice), on my own dime, ever since graduating to pay it forward to the best of my ability.  It strikes me that this isn't unlike shoppers, who we see encouraged to write their own content as they read more reviews, answers, and stories from their peers, receiving value and being motivated to pay it forward (see this study with the Keller Fay Group).

Last Thursday, I spoke from 9am-4:30pm to Dr. Stew Friedman's leadership and teamwork classes.  Stew has been a mentor for around eight years now.  He authored Total Leadership, an amazing culmination of his life's work and a book I deployed, with Stew's help (he graciously visited us in Austin twice, and our London team attended his talk there), to the entire Bazaarvoice staff last year and then this year to all of our new people.  You can read about that experience here, which The New York Times graciously covered.

Every time I return to speak to Stew's class, I reinvent my talk.  These talks come from the heart, and I prepare for them in the cab ride on the way to speak.  These are the key themes I spoke to on Thursday:

Humility. The single best leadership article that Stew pointed to me in our mentoring meetings was Level 5 Leadership by Jim Collins, author of Good to Great.  It is required reading for our executive team (and his class at Wharton), and I find myself referring to it often.  From the Wall Street meltdown, due to lack of transparency and oversight on very complex financial products (which still cannot be explained in most cases), to the hubris at AIG, we are living through a period of extraordinary transformation.

Lack of humility is a big problem in corporate America.  If you don't have it, spend some time in the real world (perhaps you should go help Dick Grace build a hospital in an impoverished area in Tibet).  Whatever it takes, get humble and reflective.  Ask the tough questions.  Don't sit comfortably with bad profits.  A lack of humility almost caused another Great Depression, but this time on a global scale.  It bankrupted an entire country (Iceland).

On the Bazaarvoice front, I believe our solution encourages humility through negative reviews.  You have nothing to be afraid of but having the data and the will to do something with it.  I have seen countless cases of initial shock to the negative, followed by the a-ha moment where the merchandiser realizes the reason they have such a high return rate with that product.  We are, after all, a digital reflection of offline word of mouth.  These are the conversations that people are having every day, like it or not (and you should like it – word of mouth drives your sales).  So have the humility to listen and do something about it.  Then have the wisdom to leverage it.

Transparency. The World Wide Web has brought us sites like Glassdoor.com, founded by Rich Barton, the founder of Expedia.  At Glassdoor.com, you have the ability to rate and review CEOs as well as report your salary information.  HR heads have reported the salary data as 90% accurate for large companies like Microsoft.  I learned about Glassdoor.com at Liberty Media's NetLeaders event last year, where Rich was a speaker (his theme: everything – people, person, place, service, product, thing – that can be rated and reviewed will be).  The Web has also brought us TheFunded.com, where you can rate and review venture capitalists (and not without an uproar).

Obama embraces transparency.  Leveraging social media, he went straight to the people for his election campaign fundraising efforts, and raised more money, in small amounts, than any other candidate in history.  And now, as President, he is bringing social media to government.  He gets his share of criticism (such as not allowing visitors to comment on some of the government sites), but my belief is that the genie is out of the bottle.  Just like his campaign is being heavily studied, and will be imitated, so will his efforts for social media in government.  No one can question that he is racing through policy discussions, from stem-cell research to reform on Wall Street.  The pace of legislation is unprecedented in modern times.

With the Web, including blogging, Facebook, Twitter, Glassdoor.com, TheFunded.com, reviews, and so many other forces, leaders will be held accountable to a higher level of transparency.  The opaqueness of poor employee satisfaction (and ethics) on Wall Street is coming to an end, quickly.  This transparency will transform leadership as we have known it.  The command-and-control style, coming out of military training, is dying.

Connectedness. My daughter, who is now 4, will literally grow up on Facebook (or something like it), with a digital lifestream of connectivity to her friends.  When she is my age, 37, she will be able to jump to a different job at a much faster pace than my generation.  She will be connected globally to friends that she has known since childhood.  If she doesn't like the company culture, her friends will know.  The level of transparency will be unlike anything we can imagine now.  As a result, the focus on leadership, management, and culture will be at a level that today we cannot imagine, as employee retention is already, today, often the most costly expense a company has.

Culture. Due to these themes, the importance of focusing on culture is greater than ever.  I'll spare you our uniqueness here, and instead provide you with this reference to all of our blog posts that have been categorized under culture – there are many.  I spend around 15% of my time focused on culture, and I believe it is largely responsible for our success as a company.

Total Leadership. Stew's book is the start of many initiatives to focus on the development of the whole person.  Although that may not directly help you sell or service more widgets (although it actually will raise performance), it will lead to greater retention, employee satisfaction, and, ultimately, productivity, in this era of transparency and connectedness.  Learn more at TotalLeadership.org (and check out TLTV).

Soul. The Corporation, a stirring documentary I watched 4 years ago, made me think hard about the soul of a corporation.  I'm a believer in karma, and the more successful we are, the more I focus on the nourishment of our company's soul.  The Bazaarvoice Foundation is a part of that nourishment, but there is much more (such as the charity CEO speaker series Tony Capasso launched this year).

After speaking all day (both exhausting and exhilarating), Stew and I had the pleasure of hosting dinner at Tequilas, my favorite interior Mexican food in Philadelphia, with Glen Senk, CEO of client Urban Outfitters; Dmitri Siegel, head of Direct at Urban Outfitters; Fiona Dias, EVP of Partner Strategy and Marketing at GSI Commerce; and Dana Lasher, an old friend from CDnow (former VP of Sales and Marketing) that helped me design Coremetrics' initial reports who is now an entrepreneur herself at get Ready girls, an affinity sportswear company.  It was a magical evening of discussion, and I passed along my endorsement of Total Leadership in the hopes of helping others.

I hope that this post encourages you to speak at your alma mater.  I have found it to be an incredibly reflective process, one of the most important leadership development activities that I do, and have really enjoyed the karma of it all.  To teach is to learn.

I've been thinking a lot about the consumer in this economy, given that consumers drive about 70% of our economy in the U.S. and a large share of the world's economy (most notably China's).  We are the world's largest shopper.  This week's article by Mr. Cooper really hit the nail on the head, leading me to believe that the recovery is going to take a lot longer than initially assumed.  This may be old news to some of you, but I have been consuming the data as it becomes available and seeing consumer saving increase so dramatically is a real turning point.

I believe that social commerce will shine in a gloomy time like this.  Consumers have always feared "buyer's remorse".  With U.S. unemployment at 7.6% and rising, in addition to the multi-trillion dollar decrease in consumer wealth, purchases will be scrutinized like never before.  And I believe customer ratings and reviews, as well as all forms of customer-generated content (and word of mouth), will be leveraged like never before.  From reducing returns to increasing sales, it is clear that social commerce reduces buyer's remorse.  This isn't just a U.S. trend, as the economic problems are global and buyer's remorse is a common human behavior, and I believe this is the driver behind Sam's recent post on UK consumers flocking to social commerce.

If you missed Sam's post in November on Amazon, I recommend you read it.  They were one of the few retailers online that recently announced stellar results during such a challenging retail season.

Our clients have been stepping up their pace of innovation with social commerce.  You can see it reflected in our many blog posts in the last two months, especially the one from Heather about the unprecented number of holiday promotions we helped drive with our Community Managers.

This will be a huge year for social commerce.  Our company is signing clients at a faster pace than ever before.  Innovation is accelerating rapidly, and not just online.  The ROI is very proven.  And I'm proud of the way we are helping our clients in such a challenging time.

Come join us from April 27-29th in Austin at our Social Commerce Summit to discuss how the best are leveraging social commerce.  We sincerely look forward to seeing you there.

When voting moves online, as it undoubtedly will (just think about all of the tax money we would save if we did not have to set up temporary voting centers everywhere), the marriage of social media and election campaigns will be that much more profound.

To be frank, I do realize that the title of my post is too far reaching.  The reality is that Obama is a truly great man and therefore a good subject for word of mouth to flourish about.  Andy Sernovitz, the founder of WOMMA and Bazaarvoice Advisory Board member, has taught us – great subjects (products, people, services, etc.) easily generate word of mouth by just asking people to help and share.

On a personal note, I took a short vacation this weekend in Laguna Beach to recharge after my week in Amsterdam to speak at Shop.org's first Global E-Commerce Summit, then back to Austin for Halloween (I couldn't miss it with our 4-year old daughter), followed by a week in London for our own sold-out Summit (recap here).  I'm here for the Piper Jaffray Global Internet Summit kicking off on Monday night.  And vacation allowed me catch up on reading some great opinion pieces in the NY Times.  This is a truly historic period that we are living in, and I encourage you to read a few of these if you have the time – they are well worth it:

• It Still Felt Good the Morning After by Frank Rich
• Show Me the Money by The World Is Flat author Tom Friedman
• Obama and the War on Brains by Nicholas Kristof
• The Climate for Change by Al Gore

As I promised, Part 2 is more focused on the forces shaping global commerce that we directly see in our business, working with our clients and partners.

5.    Digitally archived word-of-mouth: Blogs are here to stay (see BusinessWeek for a recap).  Word-of-mouth online is not a phase.  It’s a permanent shift.  Word-of-mouth has always been with us (that’s why I named our company Bazaarvoice).  More than 70 of the top 100 retailers in the U.S. have, or are launching, customer reviews today.  When Brant and I launched Bazaarvoice three years ago, only five retailers in the U.S. offered customer reviews, including Amazon.com.  Over the past three years, we have served 10 billion reviews to shoppers (see our recent celebration of this and real-time counter) and are on a current run-rate to serve another 20 billion over just the next year of our business.  Customer reviews are word-of-mouth.  People speak the same way about products online as they do offline.  We are literally seeing word-of-mouth for the first time in human history.

        Luxury retailers are still vigorously debating this – not wanting to give up control and open up their brand.  Like I do almost every week (it seems), I spent time on Wednesday in NYC debating this with the head of online marketing and merchandising of a luxury apparel retailer.  Meanwhile, Best Buy and Wal-Mart have been launching incredible multichannel campaigns (see them here and here), leveraging the power of customer reviews to drive sales online and offline.  Wal-Mart and QVC have all of their online merchandisers plugged into our reports.  They are having intense conversations with their suppliers to reduce returns, increase customer satisfaction, and ultimately evolve their offerings.  The end-game?  Better products and services for all of us.  I knew we were on to something big when we started Bazaarvoice.  But I had no idea it would affect this much change, this quickly.  The fact that Wal-Mart launched customer-review-focused, in-store nationwide campaigns only six months after they launched with us online has staggering implications for the retail industry.

        And it’s not just limited to retail.  Any market where word-of-mouth plays a significant role in driving the transaction are good markets for the type of transformation we offer.  We are, or soon will be (due to signed agreements), powering customer reviews for some of the largest manufacturers of consumer products, banks, credit unions, insurance companies, portals, travel sites, and healthcare companies.  We are doing this globally, in 20 international languages.  We have four offices now – Austin, London, Paris, and now Singapore.  This is a global movement.  As an entrepreneur, it is impossible for me to not be passionate about helping clients lead this transformation.  Word-of-mouth online is an incredibly disruptive force, and I mean this in a positive way if harnessed correctly.  Why did I start this company after seven years at Coremetrics?  Because I knew it worked – but I didn't realize that it worked as well as I know it does now. 

        Seven years ago, Michael Porter wrote about the Web’s incredibly disruptive impact on the five forces (standard material for any MBA program).  When I read this article in 2001, I thought, "Porter is late to the game".  Now when I re-read it in the context of the social media movement, I think he was incredibly visionary.  Smart companies are reaping the rewards of that disruption, while others have been too slow to change and are going out of business.

6.    Six degrees of separation (tip of the hat to my brilliant and passionate friend, Mitch): Millennials are growing up connected to social networks, namely Facebook.  Their network of friends is intact for as long as they’ve been in “the system”.  They will be able to track their friends’ progress throughout life’s many stages – forever.  I’ve been a programmer since I was 7 and have communicated online (via BBSs) since I was 8 (launching my own when I was 10).  So I can relate.  But I can’t imagine all of the implications of all of this connectedness.  What does it mean, as a human being, to be able to so easily track your friends evolution in life as they go from preteen to teen to college to career to marriage to parenthood and, ultimately, to death?  A typical Millennial is connected to hundreds of friends on Facebook.  By comparison, I personally keep in close touch with only one of my early childhood friends (a few more are reconnecting via Facebook, but I have missed decades of their life and its hard to relate to them anymore). 

        How will these Millennials be shaped by this as shoppers?  As people?  Obviously, social media everywhere will be an expectation.  Ubiquitous Web access, via mobile, is rapidly coming.  How will companies adapt?  Typical Facebook banner-ads are getting .005% click-thru rates, as reported on the Web 2.0 panel at Shop.org last week by those helping their clients experiment with them.  That’s pathetic performance!  Millennials don’t want the disruption by brands when they are in the modality of friending – unless they actually help them enhance that experience.  Being on Google, Yahoo!, or Live.com and clicking on a paid-search link when they are in a shopping modality is a whole different story, and obviously that works – ridiculously well.  Facebook applications, however, are performing when they give unique value to these consumers.  On that same Shop.org panel, the Victoria’s Secret PINK Facebook application was pointed as one good example. 

        What are the long-term implications of this connectedness?  I don’t know, but we’re determined to help figure this out by working with all of our clients.

Thank you again for an amazing three years in business.  It is a true honor to work with such smart clients, and I look forward to seeing you soon at our Social Commerce Summit. 

But recently Second Life is taking a beating.  Check out these recent articles in Time and Wired.  Even though many corporations have rushed in to grab their own virtual real estate, it turns out that not that many people are there to shop.  They are primarily there to gamble and have sex, and this shouldn't be surprising.  Many of the first businesses on the Internet were about gambling and sex.  It's the early-adopter syndrome in a medium that let's you hide your real identity and pretend to be someone else.

To be clear, I am bullish on the 3D-Web long-term.  There is no doubt that as virtual reality becomes more real and accessible to the masses, as opposed to the clunky and odd experience of Second Life today, virtual shopping will take off.  When Internet Explorer and Firefox embed 3D-Web browsers into their 2D-browsers, that may mark the tipping point.  I am also confident that this is going to take many years – at least as counted in "Internet time".  In other words, I'm talking about 3-5 years.

The 3D-Web will provide a more tactile experience than today's Web, and online shopping will blossom.  Our company has shown the potential of a more tactile experience – customer reviews allow peers to "touch and feel" a product sold online, and sales significantly increase with a corresponding reduction in returns (as customers expectations are set by each other, the element of negative surprise is reduced).  Feel free to ask us about our over 20 case studies to learn more.

Until then, I'll be watching Second Life to see how it evolves.  But I don't expect much in the near-term, to be frank.  Once a medium is hyped to the extreme and then has a counterbalancing crash in popularity, it takes years to recover.  I'm not sure that Second Life will get a second life – the word of mouth is already too negative and the community is tainted.  But there will be many 3D-Web efforts to follow…

Update 9/8:
TechCrunch reports that ICANN's CEO, Paul Twomey, keynotes at a conference with the message that virtual worlds are the future of global commerce.  William Gibson, one of my favorite authors and the inventor of the word and concept of "cyberspace", would be proud.

In any case, I view the Mozilla news as very significant.  Just like del.icio.us and StumbleUpon have Web browser plug-ins that drive high adoption of their services, so will "The Coop".  Instead of visiting Facebook as a Web destination, The Coop integrates it directly into your Web browser.  Kelly Mooney of Resource Interactive showed a great demo of "social shopping" at the Shop.org Annual Summit last year.  Resource Interactive had created the demo for Victoria's Secret Pink.  Via mobile and the Web, they made it appear easy for an in-store shopper to share an outfit that she was thinking of buying with her friends online.  Everyone benefited from the resulting feedback and shopping list it created for all.  Millennials have been shown to follow each other more than the more "independent" generations of the past, so the Resource demo seemed like a natural evolution.  And it is no mistake that The Coop chose Facebook as their embedded partner, as Facebook is most heavily used by Millennials.

The Coop will accelerate the hyper-education of consumers that is underway.  It is just a matter of time when consumers have nearly instant access to global peer ratings and reviews on any product, service, place, person, or thing.  Access no matter if they are shopping online or offline.  While that may sound scary, it will actually be a beautiful thing.  Markets will become democratized, the voice of the marketplace will be "rediscovered", smart companies will react quickly, and as a result "consuming" will be driven to higher levels as shoppers gain more confidence to buy when leveraging the wisdom of the crowd.  Manufacturers will build better products, service providers will respond with better services, and companies will become more customer-centric.  Everyone will benefit, but the short-term disruption will make the old guard question the revolution underway.  Change is often difficult.

Expect Microsoft to quickly follow Mozilla, as they did with tabbed browsing and other Mozilla-led innovations.  It is just a matter of time before social networking becomes intimately interwoven in all Web browsers.  And then we will all wonder why it took so long as adoption skyrockets.

And speaking of revolutions, have you seen the short film, "Web 2.0 – The Machine Is Us/ing Us"?  The Kevin Kelly article it references is brilliant, and the film itself is pretty cool.  It's a powerfully brief summary of Web history. 

First, on page 6 there is a full-page ad from The Home Depot, one of our clients.  It is titled "What do you call a year in which you sell 63 million Earth-friendly products? A healthy start".  This ad has a corresponding Web presence, but it is a little hard to find and it isn't mentioned in the ad.  Unfortunately, you can't yet shop for these "Earth-friendly products" online and searching for "Earth friendly" on their Web site doesn't return any results.

Second, on page 14 there is an article about Wal-Mart putting out an RFP to install solar panels at stores and distribution centers in five states.  It could generate as much as 150 megawatts of power, which would dwarf the largest corporate solar power project in the U.S. (the 1.6 megawatt project by Google).  I have been chronicling Wal-Mart's move to organics in previous posts (see my August, 2006 post).  As the largest company in the world, their scale is amazing.  And when their CEO, Lee Scott, announced a year ago that he wants to eventually convert Wal-Mart's operations to 100% renewable energy, it attracted a great deal of attention (and set the marker for others to eventually follow the leader).

Third, on page 15 there is an ad from BASF titled "Home, sweet hybrid home", which talks about their "Near-Zero Energy Home" initiative in Paterson, New Jersey.  You can learn more here (click on the house).

Fourth, on page 20-21 Honda has an ad titled "The most fuel-efficient auto company in America".  I have seen this ad several times before and like their term "Environmentology".  They have a Web presence to continue this ad, but it is hidden in very small font.  Here it is.  Why bury this in such small font?

Finally, on page 45 Hitachi has an ad titled "Coal's Comeback: The True Story of Clean Power in Council Bluffs".  This ad is geared towards the Web and plays a documentary film series.  They even have a smart strategy to get bloggers to write about this and give them code to insert a videoplayer into their post.

There are very few ads in the rest of the magazine and no more about green products.  This issue's ads, more than any other I remember, are focused on "green".  And remember this is BusinessWeek, not some magazine like GOOD. 

Maybe this is all selective perception on my part.  Or maybe ad agencies and their clients are quickly awakening to the word-of-mouth potential of green.  What do you think?

Update 1/15:
I spoke with our client at The Home Depot and here is what he had to say about the ad mentioned above (and the green trend):

"It is definitely a big push for the company as we see it as a win-win opportunity.  I think we all agree that the less impact we can have on the environment, no matter how small, is always a good idea.  Highlighting the products that are making a concerted effort to do this is the right thing to do.  From a business standpoint, consumers are much more aware of environmental issues today than they were 10 years ago.  This heightened awareness translates into stronger sales opportunities for environmentally-conscious products.  People are willing to spend $5 on a light bulb that will save them money in the long run!"

"I think if consumers are presented with similar products and one is more "eco-friendly" than another they will choose the eco-friendly product.  The Home Depot has recognized this and will start to merchandise more with this in mind.  Wal-Mart's light-bulb campaign is a great example of this!"

Update 1/16:
According to today's Iconoculture Iconowatch online newsletter, green is the big trend at the Detroit Auto Show. Glad we are going to have real options soon without sacrificing the space, power, and handling we have become used to. For more on this, check out my previous post on the Tesla and EV1.

Update 1/27:
Business 2.0's cover-story for their current issue is "Go Green, Get Rich", and The Economist's is "The greening of America".  This is why I am a technology optimist.  I believe that the problem is too large for entrepreneurs to not rally to the cause and earn the billions, perhaps even trillions (if you consider that the remaining oil may be worth $100 trillion by some calculations), to solve these problems and feel good about it in the process! 

There has been a ton of buzz (mainly positive) about the online 3D world, Second Life.  My two favorite magazines, BusinessWeek and Wired, write about Second Life in nearly every issue.  Wired called it the "coolest destination on the Web" and they loved it so much they set up shop there.  IBM recently built a Circuit City store in Second Life, and Dell recently opened up shop there as well.  I have my own views on why Second Life is getting so much buzz.  First, the promise of the Internet and virtual reality has been science fiction worthy for a long time.  The groundbreaking book, Neuromancer by William Gibson, invented the term "cyberspace".  The insane cult-classic movie, Brazil by Terry Giliam, showed a warped glimpse into the world of virtual reality.  Neal Stephenson's book, Snow Crash, made the virtual reality Web more tangible and exciting by painting a vision of the "Metaverse", which caught on as a new term to describe many massively multiplayer online RPGs (role-playing games, like World of Warcraft), and was adopted by Second Life to describe their virtual world.  Second, the promise of the Web on viable telecommuting and having a successful business that doesn't need to be located in a specific geography (like Silicon Valley) is a very real desire for many.  And third, it is just plain cool to imagine a world that you can live in without the rules of gravity (in Second Life, you can fly), where you can be anyone (in Second Life, many choose avatars that are quite interesting to say the least), and build anything (in Second Life, all it takes are a few pixels).

I have my own experience with "virtual worlds".  In 1990, I created Renegade Outpost, which grew into the most popular multiplayer role-playing game on the Internet by 1992.  I only had 5,000 players worldwide (as compared to World of Warcraft's 7.5 million today).  But, in comparison, Renegade Outpost was a text-based game which only supported 256 concurrent players and you could only access it via TELNET (there wasn't a whole lot of HTML in those days).  In any case, it was completely immersive.  Players could create their own worlds once they became immortals, and many people would play over 160 hours per month.  The ability to communicate with anyone in the game (players were connecting from Germany, Singapore, and many other places around the globe), go on quests together, and create your own world for other players to explore was a powerful draw.

So, from my own experience, Second Life makes a lot of sense.  And I am very bullish on the need for an immersive, 3D Internet experience, whether or not Second Life will be the forum to survive is the key question.  But, for now, it is a very exciting place, and I think we can all learn from it.

Giff Constable may be the best person to explain how businesses can tap the potential of Second Life, and he was gracious enough to be my interviewee today.  I first met Giff at Resource Interactive's iCitizen conference, where he and I were both speakers.  He is the VP of Business Development at The Electric Sheep Company, which builds a precense in Second Life for businesses.  Giff has 12 years of experience in Internet and software businesses, and a Princeton University degree.  In Second Life, Giff is known as Forseti Svarog (he told us why at the iCitizen conference, but I can't remember).

So begins our interview… (all images below are samples of Second Life portfolio work from Giff's company, click on them to get a full-size view).

1.  Giff, would you please provide an overview of your work in layman’s terms to our readers as they may not be familiar with Second Life?

The Electric Sheep Company is a 40-person company focusing entirely on virtual worlds, including Second Life.  If you want analogies to existing businesses, we can be thought of as a mix of movie production house meets Web development company meets strategic consultancy meets software company.  We really do blend everything from strategic advice to user experience design to virtual architecture and application development.  The cross-functional nature of our business makes for some interesting challenges and a really interesting team.

The second part of that question of course is what is Second Life itself, but that is not a simple thing to answer in two sentences and layman’s terms.  It is an online, immersive 3D space where people interact as customizable avatars, participate in an economy with an annual GDP run-rate of over US$100 million, and where all of the content seen and used in the world is built by its participants, whether individuals or corporations.  Say that ten times fast?  It is important to note that Second Life is closer to the Internet than a game, although like the Internet games are built on top of it.

2. What companies do you think are doing the best job of marketing themselves in Second Life?

I’m not sure anyone has totally reached their potential yet, but then I am not surprised given that for many Second Life is still viewed as experimental.  There are quite a few companies now, however, who have dipped their toe in the water, enjoyed the experience, and are now increasing their focus and effort in this space.  Reuters is one of best examples of a success both inside and outside of Second Life.  They received a huge amount of PR outside of Second Life, but they also received a great deal of respect in world.  I’ll touch a bit more on this [below].

3. I’m sure you read the article about crayon in Adrants (where Urizenus Skylar, who writes for The Second Life Herald, calls some marketers entering in Second Life a “bunch of desperate clueless &$%^*$&%#”).  We have seen this before with members of Facebook and MySpace vigorously defending their turf from marketers.  How do you navigate this new medium for your clients so they aren’t viewed as desperate or clueless? 

Well, I should first say that Uri loves to stir the pot – the SL Herald is a tabloid after all — but blunders do happen.  Effective navigation requires knowledge of water depths and shoal locations, and in this case, an awareness of history.  Virtual worlders are not sitting around waiting for a brand to come complete their life (probably less in the Second than in the First), and arguably brands need to enter a virtual world with a little humility.  You need to know what has come before, what has and has not worked, and you also need to have a sense of the community.  We try to steer our clients in the right direction, although they don’t always listen to us and sometimes singe a few hairs, but even that is an important lesson.  Frankly, mistakes will be made in this new medium and that is okay.  It is very early days here, and everyone needs to remember that.   It is better to be innovating and helping to define the conversation rather that show up at the party 2 hours after everyone has gone to bed.

4. What is your most exciting marketing success to date in Second Life?

To elaborate on Reuters for a bit more:  Reuters decided that their audience was going to be the Second Life residents, and they did a number of smart things to gain the respect of everyone.  They proved their intention to stick around (rather than be a PR stunt) by dedicating a journalist to the Second Life / virtual world beat.  They created a website to go alongside their virtual world presence.  We created an island for them, which they keep somewhat active with interesting events, speakers, and Adam Reuters’ office hours.  More importantly, we created some wall-mounted and heads-up displays which brought in their live news feeds.  This allowed people to take Reuters out into Second Life with them, rather than having to work really hard to constantly bring people back.  From the beginning, it was clear to people that this was a project with substance not hype, and the audience reacted very positively.

5. eMarketer predicts that advertising on social networking sites will grow from $280 million this year to $1.8 billion by 2010.  What do you think about their prediction, and how do you think it applies to marketing in Second Life?

I think that number is almost meaningless because social networking is starting to touch everything we do online, so the definition becomes increasingly blurred.  On e-commerce sites, social networking will become an important component of establishing reputation/trust around a product, especially once you can overlay collaborative filtering and reviewing technologies with social network information.   I think that the web and a Second Life-like technology will become increasingly interconnected and complementary.  We will use both, depending on whether we want a 2D or 3D experience for a particular purpose (they have different strengths and weaknesses), and depending on whether we want a live social interaction.  There is no question that people feel more “together” in a 3D immersive environment.

6. What would you recommend to Bazaarvoice clients like Sears, PETCO, or HP that may want to dip their toe in Second Life and start planting a marketing seed?

This may sound self-serving, but you really do want to talk to a longtime Second Life consulting group like Electric Sheep or one of our competitors.  The bar is being raised as to what it takes to capture attention, and you do not want to do a cookie cutter project. Even if you have fabulous creative ideas already, chances are they are going to have to be adjusted somewhere to deal with technology limitations or community relations, and you want a guide to help you.  But in terms of basic rules, many are not that far from marketing basics.  Here are a few of my common ones:

• stay honest with yourself about your brand and how it is perceived
• stay authentic and honest with consumers
• decide whether your product really translates into a virtual world or whether you need to focus on brand
• don’t think you can control everything about your brand in a virtual world (or put another way: do not be afraid of your consumer)
• create an opt-in experience and let people take your brand with them somehow
• keep your standards high – you are representing your brand and company
• like a blog, keep things fresh, new and interesting if you want people to come back again and again
• be prepared for technology bumps, because this space is new and evolving extremely rapidly, and rapid evolution in software means bugs

7. Is there anything else you would like to share with our readers?

When people come into Second Life, they ask two basic questions: what do I do? who do I meet? (the order depends on the person).  When planning your virtual world offering, try to answer one or both of these questions.

For further reading, I highly recommend Giff's blog.  First, he responds to Second Life skeptics.  And, second, Giff does a great job of highlighting 2006 milestones for Second Life.  You may also be interested in my March, 2005 blog post, in which I discuss closing the tactile gap between offline and online shopping (I didn't know about Second Life when I wrote it).

And for more Second Life images, see Giff's personal collection or this BusinessWeek slide show (which includes many images from Second Life's predecessors).  Or check out the Second Life media page, where you can view user-generated movies made within the virtual world.