A heated discussion is unfolding over at Free Beer and on the SL developers discussion board about how to calculate the ROI of the recent marketing campaigns undertaken by real-life businesses in Second Life. Bret Treasure points out that traffic statistics for the branded islands such as Adidas’s are much lower than for resident-run in-world companies in spite of all the media buzz. The developers of these properties argue back that it is the buzz itself that’s most valuable for the respective brands and that the press coverage alone justifies the investment.

Over the past two weeks, I had a chance to give two presentations on the topic, one at the Marketing3 conference in Utrecht and the other at Massachusetts Innovation and Technology Exchange. What follows are the slides from these presentations and a few thoughts they illustrate.

As more real-world brands are venturing into Second Life, it becomes increasingly harder to gain publicity by merely opening a location inside the world. When American Apparel opened its SL store last June, the news was all over the press. Six months later, many similar undertakings are recorded only by the most dedicated observers and hard core bloggers. The world of hype is moving to the next big thing.  At the same time, Second Life is yet to become a suitable environment for meaningful e-commerce. The platform is unstable, and while the total population has doubled to 1.6 million from September to November, the number of simultaneous users has rarely, if at all, crossed the 20,000 mark, and the amount of time people spent in Second Life over the same period rose 29 percent, writes Reuters.

Despite the hoopla about the first Second Life millionaire, only 58 residents earned more than $5,000 in November — a respectable number for a “game” but not the kind of market that would show up on many executive radars just yet (the numbers again are according to Reuters that has an in-world reporter).

So if it’s not about fame and if it’s not about money, why bother at all? The answer is knowledge.

Some experts predict that in the fairly near future at least part of the Internet will turn 3-D with online destinations either adopting some form of 3-D interface or expanding into the existing virtual environments (3pointD.com is one of the blogs tracking the signs of change). The argument goes that the companies that are playing inside Second Life and similar worlds today will be better prepared for tomorrow.

Besides, virtual worlds in general and Second Life in particular are proprietary, walled and self-contained gardens where the entire user cycle from shopping to private instant messaging can be monitored in great detail. In a sense, it’s like the Big Brother — the show is currently running in Second Life too — and it’s you who could be watching.

Here are some of the aspects of user behavior that are hard to study in the traditional web environment but that are perfectly observable in Second Life:

1. Socialization on both macro- and micro-levels. You can study the relationships between individuals and the dynamics of larger groups. Since Second Life allows cross-gender avatars (a real-life guy can play as a woman in SL, and many who do say it’s a lot of fun), a researcher can also find out how social expectations associated with a particular role influence behavior and consumption choices of individuals.

2. Interaction with 3-D objects. Manipulating three-dimensional spaces on a flat monitor is far from trivial. Observing how people navigate the space and interact with virtual merchandise will provide valuable usability clues for building your own 3-D e-commerce site one day. Amazon is already taking notes.

3. Consumption. Record how your customers see your ads, from what distance, under what angle, and for how long. Track the entire life span of a product from the time it leaves your store to the instance when it is unwrapped, tried on, worn, and given away or resold. If this sounds improbable, consider that “Procter & Gamble has created a new research facility which uses computer-generated imagery to re-create shops” (source).

4. Production. A small company called Fabjectory uses a $20,000 ZPrinter 310 Plus fabricator to manufacture real objects that were first “drawn” in Second Life. These objects may be small and crude, but if you are excited about the revolutionary power of desktop publishing today, wait till you wake up to the realities of desktop manufacturing.

P.S. I got this cool autograph from Chris Anderson with whom I shared the stage in Utrecht. It says, “Great to meet you in RL” (RL meaning real life). We first met a few months back at Chris’s presentation on Long Tail inside Second Life where he signed virtual copies of the same book.