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Thursday, 19 June 2008

Startup Idea #65: Transreality product placement

Product placement is becoming a dominant theme for in-game advertising. Spending on in-game advertising and product placement, $56 million in 2005, will reach $730 million by 2010, predicts Yankee Group, a Boston research firm. As virtual and physical worlds begin to converge, I believe product placement will take on new meanings and offer plenty of opportunities for clever and forward looking startups.

reBang has casually suggested Transreality product placement as a label for such dual reality type of product placement. However, what exactly is transrealit product placement? They can be three types which are as follows:

Product placement: placing physical products into virtual environments. The most common type of produce placements

Future product placement: creating physical versions of virtual products. The focus here is only selling the physical products that have sufficient interests when they are in virtual forms.

Reverse product placement: using physical products to sell virtual content/services.


So, with these kinds of ideas in mind, I think the following applications, products and services that help realise these markets is going to be achieve some success.

Market exchanges for product placement: Product placement is currently a time consuming and highly inefficient process. Companies like NextMedium have created marketplaces like Google's Adsense to automate and streamline the value chain. I think such a approach can be applied to future & reverse product placement as well. Take the latter for example. The virtual content owners in this scenario act as 'advertisers' while retailers provide the 'advertising inventory' aka shelf space. It is not difficult to construct an exchange where retailers input their available shelf space and its relevant price for virtual content to bid. The exchange also connects the virtual content owners to 3D manufacturers for the physical production of the virtual content.

Metrics agencies: To be the Nielson equivalent. For future product placement, this means collecting statistics on the popularity of the virtual items including their usage, the most popular model, the users' demographics et al. For reverse product placement, this means numbers of the retailers' 'eyeballs' equivalent such as units sold or given away, the traffic of the retail, demographic information on the retailers' customers et al.

Item aggregation site: rebang has suggested a 3D shopping site to sell virtual items created across different virtual worlds. Users can enter a virtual world to browse virtual items they have seen in the physical worlds.

Community site: An etsy -like community where users can hand-made the items that the virtual content owners want to promote. A startup can groom such a community or develop white label solution for virtual content owners to do so.

In summary, I think this is an interesting area and I am certain I have not even touch on ideas that will surely surface in the future.


csven said...

Future product placement: creating physical versions of virtual products. The focus here is only selling the physical products that have sufficient interests when they are in virtual forms.

Close, but not quite.

The idea is to use virtual worlds (including games) for the development and promotion of physical goods.

Thus, by "future", I'm suggesting that various product concepts still in development could be introduced into a virtual environment, feedback from such placement could be used to finalize the physical product, and the virtual goods can also be one form of advertising for the tangible good ... whether or not the virtual goods are sold.

What's important here is intent. The intent is to sell a physical good and turn a profit whether or not the virtual good makes money. This is in contrast to "reverse product placement", in which the primary intent is to sell virtual goods and services for profit by either giving away (as prizes, for example) or selling (at low margins or below cost) a physical product.

aaronchua said...

Thanks for the clarifications!

Any idea on whether there are companies out there specifically helping companies to future place their products?

csven said...

Within virtual worlds? No idea.