-By Michael Wilson

"Virtual World" is a term that can make marketers shudder in excitement or quake in fear.

These 3-D social communities have been regarded as an important next step in brand engagement, but their very nature and frenzy of hype has puzzled agencies and marketers about how to use them. In fact, the hype actually generated a mini-backlash of sorts, and some agencies found the results underwhelming, or downright disappointing.

On the other hand, 2007 saw big brands like Coca-Cola, CosmoGirl, Scion and IBM participating in existing virtual worlds, while MTV Networks and Disney created their own. In fact, many of these brands are increasing their participation in virtual worlds, either through expansion or re-upping existing engagements.

To confuse things even more, research firms and consumers have sent a clear message about their feelings. Gartner predicts that 80 percent of active Internet users will be members of virtual worlds by 2011.

All of this puts media and agencies in a really tough place. On the Web, we already have a plethora of ways to engage customers: search engines, social networks like Facebook and MySpace, and an apparently endless selection of blogs. Virtual worlds is yet another social medium to reckon with, and this time it's in 3-D. And, to make things really interesting, since a virtual world's engagement model is far richer than the straightforward 2-D cost-per-impression (CPM) model, we have to invent a whole new way of measuring brand engagement and ROI.

On the plus side, marketers can get far more precise information about how consumers perceive and interact with their brands and campaigns in virtual worlds. Indeed, some platforms like Makena Technologies' can report on exactly who interacted with a campaign, for how long and even capture information about how customers are talking about the brand in the world.

In other words, a virtual world has the promise of being able to tell you exactly which customers see your campaign, how long they spend with it, how they talk about it and, ultimately, if they act on it by purchasing a virtual or even a real product.

Once you buy into that promise, marketers face a dizzying array of options to choose from, as there are more than 45 Web properties deemed virtual worlds. There are worlds for children like Club Penguin and Webkinz, worlds geared toward socialization like There.com, Second Life and Kaneva, and worlds with a heavy gaming element like Worlds of Warcraft and Eve. Each world has its own community, economy, policies and politics.

Like any advertising medium, marketers don't just have to choose one virtual world. Scion has done many creative campaigns in a number of virtual worlds. The Scion brand fits well within a number of worlds, and the carmaker has worked to create different campaigns within each one, making sure the campaign will fit within the existing community ideal.

Once one or more virtual world platform(s) is selected, the hard part arises: actual campaign execution. Far from just buying a chunk of virtual dirt and setting up shop, there are endless possibilities, from selling branded virtual merchandise to virtual kiosks and storefronts to live events and complete immersive experiences built around products. This is the point where the virtual world operator needs to step in to help agencies and brands understand the dynamics of the world to ensure a successful campaign.

Like any traditional advertising campaign, success boils down to engagement. No matter how it's defined, it is still one term that resonates in both the agency and operator community.

In virtual worlds, brands have the opportunity to come up with creative ways for consumers to interact with their brands. Though it's a cliché to say, agencies really must "think out of the box" to attract and keep the attention of virtual world members, just as they would for a campaign in the real world. Banner ad models can't be applied; in fact, it would be giving some members exactly what they came to virtual worlds to avoid.

You'd guess that these types of immersive, creative campaigns will improve brand engagement. And, for once, the reality lives up to the promise: On average, our members spend about 10 minutes interacting with a brand in the world, compared to an average of 12.16 seconds interacting with traditional online advertising. That's a 6,000 percent improvement, which is even more amazing since it's based on actual data.

Virtual worlds are still in their early stages. But with the rapid growth in popularity, marketers and operators alike need to come up with a new metrics to measure ROI and, as importantly, how to monetize it.

Existing standards like CPMs need to undergo the same sort of transformation as campaigns and brand engagement: from short, two-dimensional executions to rich, immersive experiences.    

Michael Wilson is the CEO of Makena Technologies, creator of There.com and technology platform for MTV's franchise-related worlds. He can be reached at Michael@thereinc.com.