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Marketing beyond the frontier?Researching the new marketinglandscape of virtual worldsMike Sarena, Tracy Harwoodb, Janet Wardc & Alladi Venkateshd

a Leicester University, UKb De Montfort University, UKc Hanken School of Economics, Finlandd University of California, Irvine, USAPublished online: 07 Nov 2013.

To cite this article: Mike Saren, Tracy Harwood, Janet Ward & Alladi Venkatesh (2013) Marketingbeyond the frontier? Researching the new marketing landscape of virtual worlds, Journal ofMarketing Management, 29:13-14, 1435-1442, DOI: 10.1080/0267257X.2013.833776

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Journal of Marketing Management, 2013Vol. 29, Nos. 13–14, 1435–1442, http://dx.doi.org/10.1080/0267257X.2013.833776

Marketing beyond the frontier? Researching the newmarketing landscape of virtual worlds

Introduction

It is more than 15 years since Hoffman and Novak (1996) and Venkatesh (1998)conceptualised ‘hypermedia environments’ and the ‘cybermarketspace’ respectively,and their implications for marketing. These so-called virtual worlds combine thepower of social networking with the technology of multiplayer computer games,allowing new forms of collaboration (Kozinets, 2002; Ondrejka, 2007) througha kind of ‘virtual reality’ (Lanier, 1988). These have been dismissed as a sort of‘ephemeral fashion’ (Cagnina & Poian, 2009), having been associated with addiction(Hussain & Griffiths, 2008), cyber terrorism (Adrian, 2009), and gold mining inChina (Heeks, 2008). Virtual worlds are no longer simply games, however, butpotentially transformational technologies. They enable users in the form of avatarsto socialise and work as employees, set up businesses, hold international conferencesand events, attend lectures, conduct military plan battle scenarios, and providepost-combat stress support. For example, Bell (2008) defines virtual worlds as a‘synchronous, persistent network of people, represented as avatars, facilitated bynetworked computers’ (p. 2). More recently, Boellstorff, Nardi, Pearce, and Taylir(2013) have proposed that ‘virtual worlds are places of imagination that encompasspractices of play, performance, creativity and ritual’ (p. 1). They have created a newplace to enact the social (Law & Urry, 2004) and are therefore valuable sites forsocial science research (Bainbridge, 2007) and for marketing in particular (Hemp,2006; Messinger, Stroulia, & Lyons, 2008; Novak, 2010). Therefore, it is timely forthis Academy of Marketing Special Issue of the Journal of Marketing Management toconsider the role of virtual worlds in marketing, their input to marketing strategy, andtheir convergence with digital technologies, mobile applications, and social media.

A previous JMM special edition on the topic of critical marketing called for‘expanding disciplinary space’ (Brownlie, Hewer, & Tadajewski, 2009). The worldof virtuality often engenders a similar expansionist frontier spirit encouraging adisciplinary view of marketing as boundary breaking, boldly going forth to research,explore, and master new territories. But the ‘new marketing landscape’ of virtualworlds exists and is experienced by people in the world of bricks and mortar too,not only in so-called cyberspace. Virtual market spaces are not separate territorialspaces, nor are they entirely imaginary. As the empirical evidence of online marketinghas demonstrated (Lindgreen, Dobele, & Vanhamme, in press), these operate just asmuch within the physical world with a significant offline logistical support of resourceinput, supply-chain, transport infrastructure. The question arises of whether variousrelated developments – new market arenas, technology platforms, applications, andformats – signify fundamental changes in market behaviours or whether they aremere extensions of existing trends. Perhaps the truth lies somewhere in between.

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For example, often, they constitute simply a new marketing medium and may evenrepresent a new market reality. Even if virtual worlds are not entirely separatefrom their existing physical forms, they are certainly distinct and do permit a newperspective on market phenomena and associated market behaviours.

Technologies and applications are developing rapidly with a convergence ofdigital, mobile, virtual, and social platforms. Examples include virtual worlds withnew platforms such as BlueMars©, OpenSim©, and Kitely© (Wasko, Teigland,Leidner, & Jarvenpaa, 2011). There is ongoing research on virtual worlds as sitesfor social and cultural innovation (Jensen, Phillips, & Strand, 2012). For marketersfamiliar with 4Ps, a typology of virtual worlds has been identified by 5Ps: purpose(content of interaction), place (location interaction), platform (design interaction),population (participants in the interaction), and profit model (return on investment;Messinger et al., 2008, based on Porter, 2004).

Definitive terms and analyses are difficult in this field in that game environmentsare in a state of flux, and the game sector as a whole is currently in a decline,particularly at the small developer end, and many game artists are out of work. Disneyrecently closed its virtual world project for Star Wars© because of developmentcosts and time, inadequate projected returns, and importantly because of increasingdemands for more sophisticated user interfaces, design and rate of technologyadaptations, and the fact that consumers are increasingly hungry for ‘digital visualculture’.

In such a context, virtual worlds are a ‘locus of coordination’ (Shirky,2010) that have the potential to enrich experiences online well beyond thecontent of the environment, providing models of experiences rather than merelyphotographic images, textual descriptions, or media for conversation. The game hastherefore become an interactive, persistent, and pervasive medium in transition –a ‘microhabitat’ that specialises in a form of exchange and communication amongits users according to its interactive design, aesthetics, and integration withcommunications technologies. It presents opportunities for individuals to formcommunities based on interests (Rheingold, 1993), and for businesses to reach newcreative heights with their brands and the potential to address ‘secondary’ marketsand a long tail of untapped consumers directly (Blazer, 2006). This leads us to anew kind of mixed reality, where the virtual and the real co-exist – the game is notonly played inside the ‘magic circle’ but also invokes a real-world response and turnsgames for play into serious and purposeful environments – what some have referredto as ‘gwap’, that is, games with a purpose (see gwap.com) or serious games (seehttp://www.seriousgamesinstitute.co.uk/).

In general, there is an understandable tendency by both academics andpractitioners to consider and conceptualise new developments in marketing in termsof traditional and new categories. In this respect, virtual worlds are no exception.They could be studied by considering how they affect and are affected by consumerbehaviour, communications, marketing media, NPD, product portfolios, servicequality, customer touch points, value chains, relationship management, and so on.Some of these concepts do not apply easily in this context, however. Although virtualworlds are not entirely separate from their existing physical forms, it is difficultto identify the relevant frames through which to view the new phenomena duringthe process of transition and transformation. It is even more difficult to find anappropriate narrative by which to describe and conceptualise the new ‘merged’reality. Here, some traditional marketing concepts reassert their relevance. For

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example, notions of trust, interaction, authenticity, simulation, and meaning carryrenewed potential to understand virtual world marketing behaviours and processes.Readers will see that the papers in this edition not only treat old concepts in newways but formally explore new concepts and applications – in order to augmentour understanding of virtual worlds and application of the underlying principles tomarketing theory and practice.

Content of this special edition

This special issue consists of six competitive articles and one invited commentary(in addition to this editorial introduction) which cover a range of important topics ofinterest to marketing researchers and practitioners. These papers comprise theoreticalreflections, state-of-the-art reviews, empirical methodologies of various types, specificapplications, and critical reflections on the virtual world environment. Specific topicsin the virtual world context encompass branding, consumer desire, product purchase,service quality, e-sports, and a virtual world closure.

The role and meanings of brands in the context of virtual worlds has not been wellunderstood by academics or practitioners. This topic is addressed directly in the paperby Hansen which, using long interviews, explores how users experience brands in onevirtual world, employing symbolic interactionism and self-presentation. The findingssuggest that the ‘real’ meanings of brands and branded virtual goods are related tosocial interaction, avatar displays, and general activities, with brands contributingpositively to user sociability, status, and achievement. Importantly, the consequencesof consumers’ experiences extend beyond the virtual world, and these can beinterpreted as marketer tactics with implications for the development of brandedspaces and goods in interactive, social environments and potential applications toother forms of social media.

The next paper by Papagiannidis et al. studies user experience in virtual worldsfrom a different methodological perspective. It examines the determinants of users’simulated experience in a virtual store using an experimental quantitative approachin order to test three models of constructing user experience and how this influencestheir purchasing intention, both positively and negatively. For marketers, theirfindings illustrate how a virtual retail store can be an effective medium for creatinguser experiences and how this simulated experience can result in so-called valueco-creation for virtual store owners and users.

Turning to other aspects of virtual retailing, Gadella et al. provide a frameworkfor retail service quality in three-dimensional (3D) virtual environments. Users cannavigate through a representation of a virtual store using a personalised avatar, andinteract with other avatars such as sales assistants and other customers similarly tooffline interaction. Also, users can create and perform multiple identities, createvirtual communities, tell stories, build things, and set up their own companies. Mostpurchases are of digital goods where user fulfilment is immediate, and these goodsare usually ‘consumed’ in the 3D space.

Because of these features, capabilities, and interactive synchronous userexperiences, Gadella et al. propose that retail service quality is significantly differentin 3D environments from that in 2D, which are mainly menu-driven web Internetstores that operate through a group of 2D web pages, containing texts, images, andmultimedia files. The paper identifies the determinants of service quality in terms of

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four key dimensions of retailing service which influence users’ social experiences andthe flexibility, co-production, and creative opportunities. This presents opportunitiesfor retailers in enhancing social experience, responsive service, and creative co-production opportunities, for example by meeting customer desires for novelty,consumption aspirations, and managing identity.

Most virtual world research has focused on identifying the marketing potentialof virtual worlds and the potential benefits for companies of engaging consumersand their avatars in virtual environments. The decision of a brand to terminaterelationships with customers has been explored in traditional market spaces, such asoffline brand communities, but much less is known about the marketing consequencesof closing virtual worlds. The paper by Scaraboto et al. rectifies this neglected topic byinvestigating the consumer and marketing responses to the closure of Disney’s VirtualMagic Kingdom. This was an example of an ‘adverworld’ created for marketingpurposes to increase brand exposure and consumer engagement with the focal brand,where consumers contribute to the building of a brand-centric virtual world. Sinceadverworlds are part of the social media landscape, users tend to draw on the logicsof social media, emphasising innovation and creation, social bonds, sharing, andcollaboration which are particularly appealing to younger consumers (Venkatesh &Behairy, 2012).

This paper specifically explores the nature and consequences of three problematictensions which they identify between consumers and marketers which result fromits closure. These tensions relate to (a) access and ownership, (b) relationships, and(c) communication. One major conclusion of this case for marketers is that usingbranded virtual worlds as a means to an end for marketing purposes can be a double-edged sword that creates ephemeral gains in the short run, but creates subsequentcomplications in the (empty or withdrawn) market space when the virtual worldpromotion is over.

Another example is provided by Seo in his paper on the relatively new genre ofsports virtual worlds and electronic sports as a new experience economy. Followinga review and brief history of e-sports and literature from multidisciplinary sources,Seo presents a marketing conceptualisation of eSports experience which, he notes,blurs the boundaries between the marketing actors staging the experience and thoseexperiencing it. The paper goes on to examine multiple interrelated experientialperformances that map e-sports onto the aesthetic, educational, entertainment, andescapist realms of the experience economy model and to explore the roles of variousstakeholders within the value network of e-sports actors. The expansion of companieslike Blizzard Entertainment shows how companies can increase their profitabilityby enhancing players’ experience through co-creation with other actors. Seoconceptualises eSports as a discrete market segment of computer game consumptionidentified by the particular experiences that immerse, educate, entertain, and engageconsumers in competitive gameplay – what he labels the 4Es. Thus, the e-sportsexperience interweaves the player’s presence between the virtual and real worldsby immersing, educating, entertaining, and engaging consumers together by a meansof the specific forms of both online and offline play.

The paper by Denegri-Knott et al. examines a broad range of digital virtualworlds, extending the term to include the digital virtual worlds of consumptioncomprising more mundane sites such as retailers and auctions, recognising the waysin which they interact with consumption. Drawing on interpretative studies of usersof such sites, the authors illustrate how the use of software code available in digital

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virtual consumption worlds such as wish lists, watch lists, and digital virtual goodsinteract with consumers’ desiring practices. Their interviews with technology usersalso produce an understanding of how the actualisation of consumer desire in thedigital virtual world interacts with desire for material ‘real world’ consumption.A trajectory binding the digital virtual and actual material consumption was notalways apparent. From their empirical research, the authors discuss the emergenceof software-human ‘desiring hybrids’ where various aspects desire construction,maintenance, and actualisation are shared between subject and machine code. Theemphasis in this paper on the frequently neglected role of nonhuman agents inthe practice of consumer desire in virtual worlds relates to the emergence of otherpost-human phenomena more widely in marketing (Campbell, O’Driscoll, & Saren,2010).

The term ‘Metaverse’ first used by Stephenson (1992) is now a much a widerconceptualisation encompassing not only virtual worlds, but also mirror worlds,augmented reality, and the Internet (Smart, Casco, & Paffedorf, 2007). One issuewhich is raised by several of the preceding papers, most notably by Denegri-Knottet al., is the broader question of the nature of ‘virtuality’ in so-called virtual worlds,however defined, and its relationship with the ‘real’. This theme is developed in theconcluding commentary by Dholakia and Reyes, who argue that studies of virtualmarkets and consumptionscapes can benefit from a broader conception of virtualitywhich they outline and discuss. The marketing implications of these evolving formsof human interaction with virtuality and technology are even more unclear for thefuture. As Cameron, Lightfoot, Lilley, and Brown (2010) conclude, ‘It is not the casethat humans make markets, but neither is it the case that markets make persons.Rather, we need to understand the complex historical dynamic of shifting placingsand re-placings of identities, mediated by technology, which have delivered us themarkets we are now obliged to inhabit’ (p. 310).

Avenues for future research

For marketers, virtual worlds not only provide a new place to engage with consumersbut also allow us to reflect on our marketing theories and research practices.Important new concepts including the avatar as consumer and the user–avatarrelationship have implications for marketing communications, consumer behaviour,and relationship marketing theories. As Belk (in press) suggests, we are missing alarge part of contemporary influences if we only study theoretical issues offline,while from the practice perspective, the advertising sector – well known as an earlyadopter of creative technology innovations – is already embracing game technology,an example being The Magnum Treasure Hunt 2 online game which was linkedwith Microsoft maps with a live version held in Amsterdam facilitated by mobileand augmented reality. This increasing ‘gamification’ of mainstream marketing is alsoillustrated by avatar technologies used as brand personalities in web sites and socialmedia. The rapid growth in teen and children’s virtual worlds might perhaps leadto an emergent generation of avatar natives, or alternatively the avatar might bediscarded and first-person perspectives may become the norm.

With the advent of new classes of interactive technology building on the Internetinfrastructure and mobile ICTs, virtual worlds are an important step in the way welearn to harness the power of mixed reality spaces for social and economic purposes.

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For example, through virtual worlds, future technologies may be explored andexploited for commercial endeavours – emergent technologies include holographicinterfaces, haptic devices, and nanotechnologies which imbue everyday objects with‘intelligent’ properties that enable them to communicate with each other and learnfrom their human controller. Virtual environments already have the power to assistand support adaptive behaviours with impact both on- and offline, and uniquely, asa visual medium, such adaptive behaviour is traceable and recorded. For example,the phenomenal growth and use of machinima co-created within virtual worlds andthen posted through social media has resulted in its recognition as an indicator ofthe health of popular online platforms such as YouTube. Thus, as virtual worldsconverge with technologies such as mobile devices, interactive television, and so on,they present new ways of thinking about consumption, markets, and marketing.

We hope that the articles in this special issue contribute to our understanding ofvirtual worlds and the opportunities and challenges which they present for marketing.Of course, these cannot cover everything of interest, and we would highlight anumber of important avenues which they point to for future research:

• Evolution of the gamespace and mixed reality

• Convergence and emergence of technologies for virtual worlds

• Social media and virtual worlds

• Internet of things, big data, and virtual reality

• Surveillance and privacy in virtual worlds

• Virtual research methodologies

• The virtual self and others

• Virtual psychogeography

• Education in virtual worlds

Acknowledgements

We are grateful to all the colleagues and reviewers who devoted their valuable time to providetimely feedback to the authors, suggesting ways to improve their contributions. Special thanksare due to the UK Academy of Marketing and its Research Committee chaired by ProfessorNina Reynolds who selected our proposal for this special issue. We also extend our thanksto the administrative team at Westburn Publishers and the editors of JMM, Professor MarkTadajewski and Dr Paul Hewer, for their invaluable advice and guidance on many editorial,reviewing, and content issues throughout this process. Perhaps most importantly, we thankall the authors who submitted manuscripts for consideration, including those whose paperswe were unable to include in this edition. We appreciate the willingness of our colleagues toshare their knowledge and experience with the journal’s readers and for putting their workforward for evaluation and critique by their peers. It is their research contributions that madethis publication possible.

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Mike SarenLeicester University, UK

Tracy HarwoodDe Montfort University, UK

Janet WardHanken School of Economics, Finland

Alladi VenkateshUniversity of California, Irvine, USA

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