"The point of innovation is to make actual money…"

If you live in the US, you may have seen an IBM advert recently which has been raising a few eyebrows. People are saying things like “the company implies that virtual worlds are a fad and, as a result, a waste of both time and money” and even “The ad is an obvious dig at Second Life“.

I’m not sure. I can see why it looks like that, but I’m not prepared to be annoyed with IBM for damaging its influential position in virtual worlds just yet.

Before I go any further, I should make it clear that I had nothing to do with the making of this ad (if it’s not perfectly clear already, I don’t get asked about things like this <grin>). Additionally, I have not even seen the ad yet, I’ve only read transcripts, so I may be missing some subtle undertones here.

Since I have not watched it, let me allow someone who has watched it to describe it for us

The commercial starts with an employee showing off his avatar to someone else, presumably a boss. The employee is all pumped about how he can conduct business in this virtual world and how he owns an island there. The boss asks if he can make money. The employee responds with something like, “Virtual money or real money?” This sets up the boss’s response that “The point of innovation is to make actual money.”

I’m not sure what to think. Who is the fool here? Is the boss even right? Isn’t innovation about far more than just making money? (Would training and rehearsal count? What about collaboration, recruitment, developer relations, …)

Based on the transcript (tell me if I’m wrong), I think there’s another way of looking at it. What about that ambiguous question: “virtual money or real money”? The implication is that the ’employee’ character can’t use the virtual world to make real money, but everyone who reads Business Week knows that there is real money to be made in virtual worlds. What if the boss actually “gets it” and (unlike the hesitant employee?) knows that real money can be made in virtual worlds, and is pointing this out to him, and us? Suddenly the ad takes on a new perspective.

I’m not at all sure it justifies my broadminded interpretation though, and I’m as annoyed as anyone that the ad might be interpreted as “look. aren’t virtual worlds silly” and perhaps risk undermining IBM’s amazing position in this area. What do you think?

Update: since this post went up, Ogilvy have posted the ads from this campaign to YouTube. Here’s the avatar advert:

31 thoughts on “"The point of innovation is to make actual money…"

  1. I really dislike this commercial. To me the point of innovation is to further humankind. Profit, if it happens, is a result of innovation not the goal.

    It certainly doesn’t help further causes of the serious virtual world users.

  2. @z3rr0, I don’t think I agree with the “further humankind” position. That my be true for innovation generally speaking, but for a commercial enterprise, innovation in IT is only useful if it serves the goals of the company one way or another. These innovations will generally be allowed to be used if they provide a competetive advantage, or more efficiency, or new opportunities to do business, or new ways to communicate or collaborate, or something similar. It means that, when it’s all said and done, these things will have to add to the company bottomline.

    No large company is going to innovate it’s IT for innovations’ sake. That may only happen in innovative IT companies who need to stay ahead. I work at one of those, and we spent many a euro on (IBM and Lotus) innovations that never paid off (K-station anyone?) Recently, we have become more careful in examining the innovations to invest in, because at the end of the month, we need to be able to pay the rent and our salaries 🙂

  3. While I think the ad is a vague dig at virtual worlds, it’s clear what the essential point is. IBM doesn’t care about ‘cool’, it cares about how to make you money. That’s the message, and what it really means when it comes to virtual worlds is that IBM will only try to sell you on it if you can make actual money (or save actual money) by using it. Since you clearly do believe that virtual worlds go beyond ‘cool’ and into useful in an economic sense, you probably agree with the underlying message, although you might be disappointed that they chose to express it in a way disparaging to virtual worlds.

  4. The commercial doesn’t make sense when you analyze it.

    By “virtual money”, did they mean “fake money” or “imaginary money”? Surely not — Second Life Linden dollars are convertible to and from US dollars, much like Canadian dollars. Since Canadian dollars are real money, so then are Linden dollars (despite what Linden Lab says).

    Some game companies don’t allow “real money trade” (RMT), but I don’t think the commercial was about games, was it?

    So then, maybe the commercial meant “virtual money” as in “not real money”, as in “not a lot of real money”, as in chump change or low ROI. But we all know lots of people making good money in virtual worlds – in real estate, in content creation, in event planning, in promotion, in reporting, and so on.

    Maybe there’s an interpretation I’m missing?

  5. I think this is the same ad that JoelG at the Electric Sheep Company was discussing a few weeks back:

    I haven’t seen the ad, and the link JoelG put in his blog won’t work unless you join a web site with a paid subscription, and obviously I can’t see the intranet thing, but I get the gist of it.

    The older, historic IBM ad makes the point. In the older ad, from the 1990s, I think, the younger employee or contractor is showing the older IBM boss, or the older client, his new website. It’s got all the bells and whistles — flaming letters dancing on the screen. The older guy looks at all the fancy artwork and sighs, and says he wishes he had a way to get the back end taken care of, inventory, orders, mailings, etc. all online.

    The fancy-footwork kid looks taken aback, and says “I don’t know how to do that…” So database work, presumably much more complicated, is beyond this kid who could make flaming letters dance. The analogy is similar with virtual worlds. The younger guy is all excited that he has this fancy cool new thing that looks hot. The older guy is asking very pragmatically, but how are you going to make money with this fancy new stuff that is showy, but maybe doesn’t *do* much? (Like those tumbleweed-filled corporate islands of SL).

    So I think you’re totally spinning it the wrong way — you have to look at the historical antecedent here. I think the part of IBM that is very skeptical of virtual worlds, and even derides them, made this ad, and sees the virtual world hype as innovation without making money. And they’re right to have that skepticism. IBM only spent money so far, they didn’t make any. You can jaw about collaboration and saving airfare with meetings, but show me the numbers. Seriously. I’m a big believer in Second Life, but I want the numbers to be real, and the experiment to be backed up by people who see actual profits, somehow.

    I don’t think we do the awesome capacity of virtuality, or ourselves, any good, by pretending we can make something out of nothing. Listen, I speak as someone who makes only a modest income from SL the really, really hard way, in mainland rentals inworld.

  6. Couple of things about Innovation – I believe it’s about ‘Value’ and ‘Value’ is actually a relative thing depending on the point of view – the Value System – of the Stakeholder (person) making the valuation.

    So Innovation is absolutely definitely not just about money .. you can add Value in many other ways. It’s very dangerous to think it’s just about money, it leads you into all kind of dangers (the quick buck mentality ;-))

    Nonetheless, in real life, one of the key stakeholders in many situations is a Corporation or Business .. and the fact is that a key element of the Value system of such Stakeholders is about money. Even if they didn’t want it to be they have external Stakeholders (Shareholders) that force them to consider money seriously 😉

    In the case of these – Business – Stakeholders we have to face the fact that if an Innovation doesn’t add value that can be measured financially then it isn’t much use to these folks.

    Net – both points of view are right in their own way 🙂

  7. Show me the numbers.. Good question.

    Too bad I can’t find it anymore, but somewhere in the 2001-2002 timeframe, IBM published a press release that clearly stated how much money IBM had saved on airline tickets, by using IBM Lotus Sametime instant messaging and web conferencing instead of having physical meetings that required travel. That was indeed a powerful message at that time, when many corporate decision makers didn’t see the value of IM.

  8. I seem to have interpreted the message in this series of commercials somewhat differently. I agree that the whole “money” point was ill chosen. Something more neutral about value would have been better.
    But: I didn’t see this as a dig at virtual worlds at all, the “stop talking and start doing” is the point of all these adverts. And the point being that if you really want to innovate and create value IBM can help you – we do, we don’t talk. This is a commercial for IBM not virtual worlds…
    Also, I would think that people like “us” are not the target demographic for these adverts at all. This is targeted at the CEOs/CIOs that are overwhelmed by the “innovation hype” but can’t see the business value, and thats where IBM claims they can help you through these adverts.

  9. I wondered myself the intent of the message. I would like to think (and I base this upon several other ‘do’ commercial advertisements they have developed) that the same line of thought is being employed.
    In all the ‘do’ ads, people are either doing nothing, or doing nothing with something. The idea being that instead of your folks doing nothing, come to IBM where we know how to do something with .
    That being said, the premise would be a company (X) that is toying with virtual worlds, but doing so badly, without direction. Employing IBM as a consultant towards that end, will improve their visibility, thus drawing revenue from that technology. Recall revenue is not just the number of widgets you sell, or even the services you offer but it’s also measured in brand identification.

    I can see where the concept could be confusing to the general business public.

  10. If you view the whole series of ads, the virtual world one makes more sense. The point of the series is “Don’t just innovate; implement!” Or in the context of virtual worlds: “Don’t just think about how virtual worlds may be useful; ask IBM, a company that has already implemented many ideas in virtual worlds.” Note that the actor doesn’t say, “Avatars can’t do that.” He says, “My avatar can’t do that.”

    But of course, “a man hears what he wants to hear and disregards the rest,” so in a sense the ad is a Rorschach test for virtual worlds.

  11. If the aim of the advert was to promote discussion it certainly has 🙂
    I hope that the confusion of the message here does not detract from huge amount of effort and work going into virtual worlds, not just Second Life.
    The ability to make sense of all this and do something with it is important. Trying to boil down the complexities of a social and technical evolution into a 30 second ad would always be tricky.
    With the thosuands of people inside the company who now have the vision and interest in making this move forward we are certainly ‘Doing’
    Web 2 is Web Do, so doing is the most important thing.
    Experimenting leads to things that work and things that dont. The quicker we discover all those the easier it will be to meet the sort of making money objectives.

  12. IBM ads aren’t Ford Foundation grants that promote discussion or art, epredator, they are meant to sell a product.

    Perhaps as a deep cultural artifact itself, this IBM ad (which I haven’t seen) contains ambiguity that IBM itself feels in its corporate complexity about virtual worlds and their uses.

    The comments here about instilling value or ascribing value are all pretty flimsy. Something has value when people pay money for it. Did anybody pay IBM for anything to do with virtual worlds yet? Did IBM get its tier paid in Second Life with any of its business activities?

    I’m sorry, but as a small virtual businessman, I have to ask this very simple question: did IBM make tier? or not?

    It’s very hard making tier — and a profit. I know, because I do it ever month on 15 sims.

    Do you?

  13. @Prokofy Neva

    I would guess IBM got paid for some of their work but like most consulting type businesses (whether external or internal) you need to be able to demonstrate worth in a concept and interest from consumers before anyone will pay for something.

    Still doesn’t excuse them for not reimbursing @epredator for the money he has shelled out on certain islands!

    Besides if they can manage a budget to include the cost of an advert on tv the money they gave spent on SL to date will soon look like pocket change. Let’s face it, SL has now become mainstream enough for IBM to start advertising their services for it. That in itself is fairly noteworthy.

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  15. Obviously I can’t discuss financials, but it’s safe to confirm (since I’ve repeatedly done so for several journalists in the past couple of years) that yes, IBM does have lots of paying clients who have been charged for virtual worlds services. Back in December 2006 there were IBM press releasing stating it was “dozens” of clients. I don’t even know how many it is these days, but lots. Not just consultancy either (though I know that’s been doing that for even longer, since I did some of it even in the early days [grin]). Not all of the clients have been announced and obviously there are many which are work in progress so I can’t reference a long list here (though I’d like to). The ones that everyone knows are Sears, Circuit City, Wimbledon, Deutsche Bank, … There are more that I know I can’t talk about, and many that I’m not sure if I can talk about, which are in all sorts of different industries (media and entertainment, banking, industrial, corporate collaboration, retail, and more besides). Someone from the 3D Internet team may want to add something here.

    I don’t think it’s fair to describe the IBM sims in SL as “tumbleweed-filled” either. Looking at the mixed reality headcount stats that Tateru Nino keeps, I’d say IBM is a pretty popular destination (often coming number two only to the Pond in that list).

  16. Hey all, maybe being from the States makes a difference in looking at this – Prokofy nailed it, I think earlier talking about how this references previous material, and was designed to invoke images and thoughts of other ads that might have only shown in the States. How about “Smith Barney – we make money the old fashioned way – we EARN it”. Same kind of old boss mentality. And then there’s a whole perspective I haven’t seen discussed – what is the target audience for this ad? Are we only playing this on FOXNews? When Hardball is airing? McNeil / Lehrer? I’m betting you’re not buying time for this during Nova.

    The Financial community including all of the corporate finance people – in case you haven’t looked lately, its not IT that runs the show, its Finance. IT organizations have been rapidly folded in under Finance again, despite having snuck out a decade or so for some sunshine. Everything we do in IT is financially motivated, must have not just a favorable ROI but also be in the top 25 or so projects with the highest ROI to get any funding.

    Some of you know I want to make Web3D & Virtual Worlds my future meal ticket. But I can only do that when I can easily convince my CFO that my project either generates or saves a boatload of $, be they GBP USD CHF EU or LL. What’s the #1 project over the last few years across IT and other infrastructure groups? Outsourcing / offshoring, nearshoring, etc. There’s not a shred of humanity that gets brought to the table here for the affected individuals (you can argue the receiving country gets benefits, granted) there’s only one objective – money. Ultimately we’ll do (usually legally) whatever to whomever to make or save money.

    This ad is just a wakeup call or reminder from your friendly local finance officer – the clock is ticking. Make me some money or its time to move on.

  17. @all I think we should not get mixed up with just dealing with one virtual world platform either. The underlying future for all this is mainstream IT with an added layer to cope with the addition of the new business models, practices and opportunities within this.
    This is hardware, software and middleware, this is design and development, this is services engagements, this is strategy and change consulting and this is business process re-engineering. Virtual worlds are consumers of services themselves so this is SOA (Service Oriented Architecture).
    We started in the web business with no products. We stil built websites and then started to integrate into the mainstream business. We helped ourselves and our clients to understand the web, then over time brought products and expertise such as Websphere and Lotus to the business of the web. Tivoli along to manage it all and Rational to help up build software.
    The key here is to understand the depth of this, not worry about the initial R&D that has to occur in ANY product cycle. The difference here is the R&D is very public.
    As we have found with many enabling technologies the ROI is not the obvious one. If you change the way people in your company communicate and make that more efficient you have a knock on effect to producing everythign else you do in a better way. That is just one important strand and is in some ways a halo effect rather than a pure commercial cause and effect. It is however real, it works.
    So whatever the ad says, it has provoked discussion, as has the ability for us to blog about it too.
    I agree in some ways the clock is ticking though @Alan. This is a clock ticking to make this the most effective thing it can possibly be, rather than a binary virtual worlds or not decision.

  18. So in summary, the ad was trying to say “Don’t hire the kid next door to help you get your company into virtual worlds, hire IBM.”

    By the way, IBM took out a two-page ad about virtual worlds in the latest Macleans Magazine, Canada’s main weekly news magazine (Feb. 4 edition, pp. 42-43). It’s an interview with Chuck Hamilton, New Media and Learning Leader for IBM’s 3D Internet Division. He’s very upbeat about virtual worlds.

    At the end of the ad, they say “To view the interview, please visit http://www.macleans.ca/ibm + register for the Innovation in Action Online Summit, May 13, 2008.”

  19. I have to admit I may be too close to the subject of the ad (being the person inside Dell who evangelizes for our continued explorations in virtual worlds), but my biggest beef with the commercial was the “point of innovation is to make real money” line.

    Having worked at the Superconducting Super Collider (http://en.wikipedia.org/wiki/Superconducting_Super_Collider) before our US Congress killed the funding for it, innovation and exploration for the sake of just finding out what’s possible is something I value.

    And, I just have to wonder (while totally understanding why we’ll never hear) how much money IBM’s clients such as Sears and Circuit City have made… I can admit Prok, that Dell hasn’t made tier from in-world sales.

    Doesn’t mean I don’t think we have received other goodness such as community and brand building from it, though. Or, that I’ll stop promoting the other benefits we have seen and those that are still out there to be discovered.

  20. @Laura, don’t understand why you are combining innovation and pure research. Two totally different concepts. You are absolutely right, pure research for its own sake by governments et al is good and should be fostered for what it is. In business, innovation is taking something existing and doing it better. And the only reason for that is higher profits. Be that less cost, more revenue, reduced time to market, etc. The ad referenced innovation, and the comment is correct.

  21. ‘Stop Talking, Start Doing’… you’ve gotta love (ok, perhaps only respect) people who can come up with a 4-word strapline to drive an entire campaign, no doubt costing squillions. And then gasp at the sheer bravado of making a series of ads in which “doing” is entirely absent from the ad. I get the “stop talking”… but I’m not seeing much in the “start doing”.

    The virtual worlds thing? I’m not in Media Studies, so I’m not fully au fait with all the cultural references and the cunning ambiguity (“is it? isn’t it? is it? isn’t it?”) of it. It’s just another example of someone talking out of their backside… like the other ads in the campaign.

    It is worth searching YouTube for “Stop talking, start doing” – and watch some of the other ads in the campaign. hehe… How ironic to think of virtual worlders as thin skinned.

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  23. Isn’t IBM about to introduce their own synthetic world business product very shortly? It’s my understanding that it will be demoed on the 19th or 20th.

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  25. I wish I knew how to put together a machinima, but in the absence of that I’ve written a script in replyending with the tag:


    Come on folks! We’re supposed to be a creative community – surely the best reply is a machinima of our own???

  26. Pingback: Dusanwriter » IBM “Making Money” Ad - Revised Script

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