At the moment, Linden Lab are profiting from its userbase in several different methods. The bulk is provided from buying sims and tiers, but then premium accounts also raise a healthy revenue. Every purchase and cashout of Lindens incurs a charge, as does transactions on XStreet SL. Classifieds in world and upload fees provide a healthy chunk of change to the Lab, and with new products like SL Enterprise, they’re constantly finding new ways to bring in revenue.
So how long before they sell us – the users?
Each time we use Second Life, we give away more information about ourselves. Everytime we join a group, we essentially tag ourselves to our interests. Each time we enter a search term and select somewhere to teleport, we provide data which gives an idea of interest. Everytime we write a sentence in open chat, we’re giving out streams of keywords. Every purchase on XStreet SL can be tracked to note what sort of items we like to buy.
This is a marketer’s wet dream – access to this sort of data is a goldmine for advertisers. Our access to Second Life is free and open, but we are essentially trading information about ourselves in return, and all this data is easily harnessed by Linden Lab.
And with additional data about spending habits, they can match how much we spend to what we spend on. The bonus of the virtual world is that we often buy things that we may not be able to in the first life – unless it’s directly offered to us to make us think about it.
Lets say you buy a piano on XStreet SL and it’s delivered to your inventory. Lets suppose an advertising image is attached to that delivery with a notice of an online retailer who would like to offer you a discounted piano for real life too? You might think “No, thanks” but if the seed is planted, then you may come back to it in the future.
Supposing you join a group in-world for fans of Blues music. Suppose Linden Lab then sent out a notice in this group advertising a new Blues CD coming out, and offering an exclusive price for members of the group – again, this represents data mining in which Linden Lab stand to profit in a big way.
And with Age Verification and Credit Card info on file, Linden Lab already hold our real life details, which a small and quiet change to the Privacy Policy could pave the way for a new potential windfall for the Lab.
Second Life residents share more intimate information within Second Life about themselves than they do on websites such as Facebook or Twitter, because a thin veil of anonymity makes them think they are safe from revealing true interests and activities which they may not want first life friends to be aware of.
This is the sort of information which advertisers crave in order to be able to target their market – not just interest and what appeals to users, but also how much they spend and how much they are willing to spend. Someone who spends money on virtual goods online, has no problem with purchasing real products online.
The goldmine is there for Linden Lab to monetise. So perhaps the question isn’t “Will?” but “When?”
Lena Franciosa on February 22, 2010
Very interesting post, although for the Age Verification point, data are not stored and if they were I don’t think it would be very accurate as a lot of people register with celebs or fake data.
QueenKelle Kuu on February 22, 2010
If they are already making a healthy profit, why would they risk alienating their users (and source of said profit) with something like this? In my mind these are the tactics taken by companies that fail to create a solid revenue stream from their product alone and then therefore must rely on more “intrusive” methods.
Also, although they have all that information, the relevant collecting, sorting and making all that useful so that it could be used as a point of sale method is far more difficult than just “we have the data, now let’s use it”
If anything, I could see them utilizing some buying data to provide more targeted advertising on xstreet, but I would see that more from the point of delivering more relevant banner ads from their xstreet merchants. In other words, what we have now on xtreet, but better targeted (which, necessarily, wouldn’t be a bad thing if that targeted banner ad helps you find what you were looking for in the first place).
The fact is, what we buy and consume in the virtual world many times has very very little overlap to the real world. In some people it may have more overlap. Speaking personally, I see very little personal corelation. Sure I may buy a virtual piano, but I think that gives very very very very little RL indication whether I may be in the market for a RL piano–music lover or not, it’s a money and space issue for most people, and usefulness too I would guess, you’d probably want to be sure you’re going to use the thing if it’s so expsenive and takes up such a big part of your RL home. In SL, I may just be buying it because I have an extra room to fill or imagine a sexy cool picture I want to take sitting on top of a piano. For an advertising buy, that small link is so tenable at best that it would not make a good buy for a advertiser’s dollars, certainly a much worse buy than, say, buying ads on a google search for piano.
I’m not saying that LL won’t go after more revenue streams, but I doubt it will be anything so blantant, in your face and annoying. Unless, of course, their other revenue streams dry up and they are forced into such methods.
colleen Criss on February 22, 2010
Except under certain limited circumstances set forth here and in our terms of service posted at http://secondlife.com/corporate/tos.php, Linden Lab does not disclose personal information you provide it to any third parties without your permission. Linden Lab may disclose your personal information if required to do so by law or in the good faith belief that such action is necessary to: (a) conform to the edicts of the law or comply with legal process served on Linden Lab, this web site or any user of Second Life; (b) protect and defend the rights or property of Linden Lab, Second Life or the users of Second Life; or (c) act in urgent circumstances to protect the personal safety of users of this web site, Second Life or the public. In addition, if Linden Lab should ever file for bankruptcy or merge with another company, we may sell the information you provide to us on this site to a third party or share your personal information with any company with whom we merge.
How We Protect Your Personal Data
We comply with applicable laws and industry standards when transferring, receiving and storing consumer data. Access to your personal information is limited to those Linden Lab employees who require the information in order to provide products or services to you or perform their jobs.
http://secondlife.com/corporate/privacy.php
According to this would they then not be in violation of thier own TOS and possibly open to lawsuits over it?
Will Linden Lab Sell Our Souls? « Metaversally Speaking.. « Autions on February 22, 2010
[...] Today found this great post, here is a quick excerpt : So how long before they sell us – the users? Each time we use Second Life, we give away more information about ourselves. Everytime we join a group, we essentially tag ourselves to our interests. Each time we enter a search term and … Read the rest of this great post Here [...]