Second Failure

With Marchionne at Fiat’s helm, corners were cut at Lancia. Yet, the company indulged in a pointless, bandwagon-jumping, and failed marketing drive in Second Life. 

The 2008 Lancia Delta in real life. Image: autocentrum

I thought the gross mismanagement of Lancia at the hands of Fiat had been exhaustively detailed, both here and in other corners of the internet. Recently, though, I spoke with an old friend from my university years, who like me, owns a third-generation Delta[1]. It had been a while since we last spoke, so our Skype call lasted a while, as we talked about all manner of things – from our family lives and our jobs to the things that interested us back then.

One of those things was Linden Lab’s once-overhyped, but now largely forgotten 3D, sandbox-style, virtual world named Second Life[2] (SL for short). As young, wide-eyed PhD candidates looking to explore the capabilities of contemporary virtual reality platforms for collaborative design and simulation, we had both dabbled with it. Seeking to attract investors looking for a quick buck, LL’s founder and CEO Philip Rosedale made extremely bold claims about how SL would replace the web as we know it[3]. Despite his spin, SL was not the first sandbox-style virtual world – this title belongs to Active Worlds, launched in 1995.

Of course, Rosedale’s promises never materialized. Being a virtual sandbox, SL relies on user-generated (read: mostly made by amateurs) content. It’s also a high-resolution, online, 3D environment where data (lots of data!) is transmitted in real time and 3D models are rendered – again in real time. These factors mean you absolutely need a reasonably high-performance (read: costly) 3D gaming computer connected to a stable, reliable, unmetered, and fast broadband connection. Otherwise, it’s going to be excruciatingly slow and very ugly to look at. So, it has a non-trivial cost of entry. And you can’t use it through your web browser: you need to download and install a dedicated viewer application in order to use it, and its learning curve is substantial.

Also, if you want to have a somewhat permanent build in SL, you need to rent virtual land, which doesn’t come cheap: full-capacity (footprint is always the same – 256 x 256 meters) regions cost around €300/month. A lower-capacity (i.e. how many objects and avatars can be hosted on it) type of region called a homestead costs around €130/month. Of course, you can rent a parcel (a smaller plot) for far less money, but its capacity is more limited, according to its footprint.

Furthermore, when it came to social networking capabilities, Facebook and other already-existing social networking services (including Yahoo!) literally wiped the floor with it. As one can guess, SL could never possibly be for everyone, and it could never attract the hundreds of millions of users Rosedale promised. In fact, its active user numbers remained stuck at roughly 900,000 – without counting the tens, if not hundreds, of millions of bots and duplicate/throwaway accounts.

So, was it a failure? Not by a long shot, actually. Its user base may be small, but it’s extremely dedicated and enthusiastic, and its internal virtual economy generates healthy profits both for the company and for a number of talented users who have decided to make a living by creating and selling content for SL and other similar platforms. In fact, it’s profitable enough to justify continued investment, and today’s SL is far more advanced than it was in 2007.

The Lancia Village in Second Life. Image credit: Motor1.com

Now, what does Second Life have to do with Lancia? Well, while the hype machine was revving, a number of brick-and-mortar corporations set up offices in SL, perhaps as a way to attract and contact potential customers or as virtual offices for teleconferencing. Having visited some of these virtual offices, I couldn’t help wondering what they were thinking. One of these companies was Lancia[4] – in fact, they were rather late to the party[5].

At the time, I couldn’t help wondering why they would even bother: most of SL’s users (called residents) lived and live in countries where Lancia doesn’t even sell its cars in the first place: the USA, Canada, the UK. Also, given that this was in the days when SL’s graphical capabilities were still rather primitive, the virtual renditions of Lancia’s automobiles were crude caricatures, as you can see below.

Back in 2008, Second Life’s graphical capabilities were too limited to allow a designer to make an accurate rendition of curvy cars like the Lancia Musa. Image credit: Lanciapress.com via Blogmotori.com

And then, it was reported that the third-generation Delta would debut in Second Life, before its unveiling at the 2008 Geneva Motor Show[6]. Again, why? Due to SL’s technical constraints, no more than one hundred people could possibly attend it – let alone that SL’s demographics made it unlikely to resonate with the vast majority of the user base. Besides, as mentioned, SL’s graphical capabilities at the time only allowed for really crude models – there was no way an SL-specific model of the Delta of that era would do justice to the real world design. At the time, I didn’t pay attention to Lancia’s SL-related announcements. I simply wasn’t interested in virtual corporate presences any more, as they offered nothing an ordinary website didn’t. So, I skipped the Delta’s virtual debut.

If you sit down to read Richard’s review of the Delta again, you’ll understand that its potential was hampered by a lack of proper development. Yes, it had a sprinkling of upmarket materials (lovely Poltrona Frau leather, alcantara, Benova imitation leather on the dashboard fascia, fade-and flake-proof double-shot[7] buttons on every illuminated switch), but the rest of the car was let down by some serious penny-pinching that you could see, feel, and hear. In fact, I recall Marchionne’s lieutenants bragging about how they developed the Delta very quickly and on a shoestring budget.

Now, let’s get back to Lancia’s attempt to make itself visible in Second Life. I don’t know exactly how much money was spent on Lancia’s virtual premises, which were named Lancia Village. At that time, the norm for the development of a corporate presence in SL was €50,ooo. Given that Lancia rented not one, but four regions, I believe its budget was more to the tune of €75,000, perhaps even higher. Given what we already know about the platform’s demographics, technical capabilities, and reputation at that time, this expenditure seems rather extravagant and totally at odds with Marchionne’s drive to do things as cheaply as (in)humanly possible.

It’s no surprise that Lancia Village followed the footsteps of so many other corporate presences in SL and never gained any meaningful traction. In all honesty, the four regions it consisted of didn’t live up to the expectation SL residents have of the places they visit. There are all sorts of publicly accessible places in SL to cater for just about every taste: from museums, art galleries, and libraries to dystopian post-apocalyptic cyberpunk cities, from virtual airports and harbours to shopping venues (fashion, furniture, etc.), and from support groups for marginalized people to strip clubs and brothels. And that’s not counting the thousands of photogenic landscapes and cityscapes where shutterbugs can take photos to share on Flickr, DeviantArt, or on their blogs. One principle that unites all of those tremendously varied virtual places is that their creators and managers aim to make them perform a certain function, in tune with the expectations created by their design and identity, and to make them interesting.

With that in mind, what was the Lancia Village? Essentially, it was a virtual car showroom. What do users expect of such a place? To see a collection of vehicles, learn about them, test drive them, and also have the opportunity to buy them. Lancia apparently made the same mistake all other car manufacturers made: they didn’t offer any virtual Lancias for sale, either at their virtual showroom or on SL’s online marketplace. No one’s ever seen a virtual Musa, Ypsilon, Delta, or Thesis parked or moving around in SL. This makes it obvious that neither Lancia nor its SL contractor (sorry, I meant solution provider) did any kind of homework.

Gridsurvey.com
The Lancia Village ceased to be in June 2009. Data: Gridsurvey.com

The Lancia Village went offline in June 2009, never to be resurrected. For all the publicity its founding was given, its demise was quiet and unceremonious. About as quiet as it was when it was online. The only trace it left in SL is its inworld (i.e. you have to use the dedicated viewer in order to interact with it) group, which still exists. But don’t be fooled: it’s still there not because anyone at Lancia is dedicated enough, but because SL still doesn’t provide group managers with an explicit way to delete their groups; they’re automatically deleted some time after everyone’s left or been ousted (ejected).

So, it’s more of a case that no one at Lancia, or its solution provider, bothered to take the necessary steps to ensure the group would be deleted. Currently, it still has 194 members. Judging by their choice of usernames, most of them must have been from Italy, Lancia’s core market. Of these people, only six logged in to the platform in 2021. There are four others whose last sign-in was in 2020. All others left SL years ago – about half of them in 2008 and 2009, with some extending their presence into 2010.

As one can imagine, since the majority of SL’s users couldn’t buy a Lancia in real life, Lancia Village was largely a folly. But could it have been useful? Or, at least, less of a folly? The answer is yes – emphatically so. They could have used it to make Lancia known and relevant again outside Italy, and even to regain some control over the narration of Lancia’s history, which is something Lancia badly needs. We all know this narration had been hijacked by tabloid scandal-mongering “journalism” decades ago.

They could have hired a professional 3D game asset creator and a professional scripter (programmer) on a full-time or per-project basis, to ensure that the virtual Lancias would look good and drive somewhat less badly than other SL cars. Of course, they should sell them to users. They could have made a museum area, complete with all sorts of interesting facts and factoids. They could have hired a few hosts/hostesses and DJs to organize events and parties with themes relating to Lancia and Italy. They could have recruited some of SL’s more popular bloggers to write about their virtual presence, their virtual products, and their events. And so on, and so on.

Would this have cost more than they already paid? Perhaps. Perhaps not. Remember, they rented four full regions for a year and a half, which set them back about €21,600 for tier alone. Other corporate entities made do with just one. Would it have been profitable for Lancia to do what I suggested? In all likelihood, no – even if they rented just one region. But what matters is that a more involving and properly-managed SL presence would be far more meaningful, and it would give them unprecedented control over their image and perception.

Furthermore, Lancia would gain the experience to leverage the growing popularity of modern 3D games. They could license high-quality 3D models of their cars to other virtual worlds, 3D asset marketplaces (such as CG Trader, Turbosquid, or Sketchfab), and gaming studios. This would not only bring them some revenue from licensing fees and/or direct sales, but also make them look cool and relevant to an audience that’s way too young to remember the Fulvia HF or the flawed charm of the Gamma Berlina – or the largely fabricated Beta rust scandal.

What they did instead was, as I said, make the same mistakes as those that came before them, and so their endeavour was a complete waste of money. They made a static, boring build that someone would explore for about ten minutes and then leave, never to come back. Then again, that’s what happens when, for all your expensive degrees, you have no meaningful grasp of marketing and are too much like James Thurber’s scottie who knew too much to ask and learn what makes a successful, engaging, involving, and even profitable virtual presence.

Sources, quotations, & acknowledgements:

[1]  Swimming in the Bight – Lancia Delta review : Driven To Write, 29 August, 2017

[2] Second Life official website

[3] Today Second Life, tomorrow the world – The Guardian, 17 May, 2007

[4] Nasce il Lancia Village su Second Life – Blogmotori.com, 25 January, 2008

[5] Tom Armitage: Second Life used for a first look – Autonews.com, 18 February, 2008

[6] Lancia Delta To Be Unveiled On Second Life The Day Before Geneva! – Motor1.com, 19 February, 2008

[7] Double-shot moulding – Deskthority Wiki

Author: Konstantinos Tzoannopoulos

Industrial engineer. Disgruntled lover of Italian cars. Virtual worlds dilettante.

23 thoughts on “Second Failure”

  1. I own a Delta 844 with the 200 HP petrol engine 6-speed auto. If this car was developed on a shoestring budget they delivered a first class job. The only thing I don’t like about the car is the electronic powersteering and the frontseats which are sub-standard in my opinion.

    Fast, practical and nicely built. Love it after owning a 159 2.2 JTS which never ticked any boxes for me.

  2. Good morning Konstantinos. Welcome to the ranks of DTW authors and congratulations on a fascinating and well-written piece. A very timely one too, given Facebook’s recent rebranding as Meta and its shift in focus to the Metaverse.

    I have to confess that I had to read your piece slowly and carefully, as this is all virgin territory for me. It seems like a strange diversion for a company like Lancia, who’s real-world situation was and remains so parlous. Perhaps they were a decade too soon as well, given clunky and unconvincing 3D renderings of the time?

    I’ve little doubt that virtual reality and the Metaverse is going to be the next frontier to be conquered in the evolution of the Internet. I better learn something about it, so thanks for the prompt!

    1. Thank you Daniel! There was a lot amiss about the way corporations sought to leverage SL, and don’t get me started on how Rosedale pitched it. Truth be told, its specs make it unsuitable for many uses, and thing in older days were much worse.

  3. What an extraordinary article and piece of writing – I congratulate Konstantinos on a really interesting and informative read. I am aware of SL (it has featured many times on the BBC News programme ‘Click’, of which my daughter is an avid watcher) and find it fascinating, bewildering and frightening all at once: I struggle with keeping up in my ‘first life’ and can’t imagine finding the energy, concentration, etc., to live in a parallel universe at the same time.

    Anyway, the Delta in question keeps popping up on sites and in publications I read frequently at the moment (for example, Keith Adams has bought one and it features on AROnline, for those that are interested), and it’s a car I admire in terms of design, even if it has many faults (I am used to cars like that, in fact I have a positive predilection for them). Note that the excellent Mr Adams’s example has had its Chrysler badges swapped out for Lancia ones, making it much more acceptable in my eyes.

    1. Thanks for your kind words! In an upcoming post, I’ll examine why corporate attempts at leveraging virtual world platforms like SL were doomed to fail. I’ll also have a more in-depth look at car manufacturers’ relationship with the virtual (games, virtual sandboxes, etc.)

  4. Yeah I remember Second Life. My hometown of Malmö, Sweden, paid about a hundred thousand euros to have a web presence on SL, I think the idea was to build a complete replica of the town within the game. I haven’t heard anything about it since the news they were two years behind schedule.

  5. The last Lancia Delta was a car I very much wanted to like and so the account of it here at DTW was disillusioning (I’ve never been in one myself). I still think its style and unusual format were great.

  6. In November 2019 I stood on a street corner in Lisbon, looking at the night-life. A poster clung to the wall behind me urging me to look at the sea. The caption said “on-line, off life”. Nicholson Baker´s book Fermata deals with a character who can stop time. This means he ages faster than those in the world he pauses. And Iain Bank´s novel Walking on Glass describes entities who pass their time plugged into viewing domes showing other people´s lives. All three of these scenarios model the hazard of a thing like Second Life. Like D. Foster Wallace´s critique of television, we can understand SL might fill the void of real life but only by further cutting you off from the things that might lead to the human connections that make life meaningful. Second Life´s name is as misleading as Ikea´s promise to provide space to live your life: the one thing Second Life is not is a life and the one thing Ikea can not sell you is even 1 cubic millimetre of space. They sell space filler instead.

    1. Second Life has been mismarketed and misdefined even by its own developers. What it really provides is a semi-collaborative, interactive 3D creative platform that allows its users to express their creativity and imagination, share their creations with others, and even reimagine themselves in ways RL societies discourage (which is why it’s so popular among LGBTQ people and people with disabilities). But it’s not a replacement for the web, and, because of its design, it can’t compete with other game and simulation engines like Unity 3D.

  7. Wow – that’s at the edge of my knowledge and understanding. It was a well-written article, as the concepts involved are pretty abstract, but it was still comprehensible.

    I don’t know whether to find the idea of Second Life hopeful, in that it allows one to explore one’s creativity, or depressing, if it’s used as a means of escape. Both, probably. Are there any other car brands that invest in SL?

    1. No car brands have remained officially on the platform. The main reasons for this are:
      1. Technical. SL isn’t the best platform for simulating vehicles
      2. Copyright maximalism. Car brands have shown they want to dictate what people do with them, both in the real world and in the digital realm.

      There are, however, numerous vehicle vendors in there. They mostly use 3D models ripped from other games and integrate appropriate scripts in them. Many of them are “here today, gone tomorrow” as a result of aggressive DMCA filings.

  8. I remember this initiative. I dare say that the author put significantly more thought and effort into this piece (very informative and well-written, btw) than Lancia’s management ever did in their decision to pursue this.

    But I have to say, unlike Konstantinos, my abiding memory of the whole Lancia-in-Second-Life thing is that it was quite a period Marchionne thing to do. In the end, it was all about ‘making media noise’ for, in car industry terms, pound-shop budgets. This SL thing needs to be considered in the context of Lancia’s other marketing efforts at that time, which were, frankly, pretty much non-existent. I can imagine the problematic that led to this initiative being signed off being along the lines of, “How can we have something that we can justify releasing Europe-wide press releases for, has an actual deliverable product, and incidentally, also doesn’t cost more than 100k euros?” Even back then, Lancia was given pretty much zero marketing budget over the absolute bare minimum you can get away with, so a big TV campaign or anything sustained in the glossy mags was out of the question. Reading the press releases around this at the time, it was hard to avoid the impression that it was dreamt up as a “Why not, maybe we’ll get lucky with SL becoming the next Facebook” sort of initiative rather than anything that resembled a coherent, well-thought-out way to shift cars.

    With that said, the whole thing was rather of-the-era – it almost felt like everywhere you looked back then, there was a new digital ‘disruptor’ popping up every week, and it was impossible to keep up. I don’t really remember too many OEMs going down the Second Life hole in this manner, but I do know that there were a number of initiatives from some pretty big names that I am sure they would quite like to be airbrushed from history. The major difference in Lancia’s case is that this amounted to a major prop in their entire strategy, which is why we are still reading about it…

    1. Without going to so far as to do any research, the cost of having a car factory ready to make one line of cars runs to hundreds of thousands of pounds a day. The further cost of actually telling someone the car exists (and which leads to demand for the car and so a return on investment) is nugatory by comparison. Is it really the case that it makes any sense to have a product and then baulk at the comparatively tiny sums needed to promote it? A million euros for a sustained press campaign e.g. single page ads in a glossy magazine or a back page ad on a newspaper would surely produce sales simply by raising awareness of the car over other cars? Ford and Opel and BMW sell cars on the basis of their advertising spend as much as anything good about the cars. The Lancia brand is shipwrecked in a place in the manegerial space-time continuum where up is down and down is left and all directions point to to wrong. “What´s you ambition for Lancia, Mr Senior Executive?” “I want to a) leave plenty of material for case studies of bad management and b) it is a conceptual art piece about the destructiveness of late-stage capitalism.”

    2. “What´s you ambition for Lancia, Mr Senior Executive?” “I want to a) leave plenty of material for case studies of bad management and b) it is a conceptual art piece about the destructiveness of late-stage capitalism.”

      Lol.

      But to your point, I should clarify what I meant by ‘the bare minimum’ – in the Delta’s case, it amounted to a real box-checking exercise. It had the appearance in a film (Angels and Demons); it had the Geneva launch (with all expense spared, as we have discussed); it had a nominal amount spent on the rollout across Europe and a half-hearted dealer network expansion. But that’s just the point, isn’t it? The bottom line is it was never a serious effort because the entire existence of the brand was a distraction and an irritation more than anything. The whole market position of the Delta makes this plain – they made it a C/D-segment car because Fiat already had a mainstream C-seg hatch, a D-segment ‘thing’ (Coma), and the 159 for ze premiums. So of course it was only natural that they came up with the whole idea of the Delta as a way to avoid treading on any of those segments, and simultaneously theoretically drawing customers from all of those segments. Model overlap avoided, and Lancia manages to cover multiple market segments with one car, which is all they had budget for. But really (and I am aware various people here have Deltas and like them), let’s be honest here – does this sound like a car that actually fit the desires of people in the real world, or a gap in a PowerPoint presentation? Again, we are back to the box-checking tendency. For me, the Second Life arena fit perfectly into this approach – it was a digital presence, because that was what was on-trend back then, except executed with zero finesse or any understanding (and to be fair, likely budget) of what was needed to make it successful.

      I am pretty sure the only reason the brand continued to exist was that Fiat couldn’t really afford to give up even the 100k-odd sales the Y was contributing to the ledger, so Marchionne did what the last few predecessors had done and just kicked the can down the road by green-lighting the absolute bare minimum investment they could feasibly get away with. The Delta wasn’t just cost-cut where you could see it; everyone knows it’s a Bravo underneath, but it’s really about as close to a cut-and-shut Bravo that you can manage as an OEM.

    3. I´m happy that Delta 3 owners are happy with their cars – it´s their money not mine. I found it a much less substantial product than the Lybra (despite its sticky glove box lid).
      It might sound reasonable to talk of a Lancia as “a distraction” and I know what you mean. It is however not as helpful away at describing the attitude. Fiat as an entity easily had the brain power to juggle Lancia and all the other brands. It´s done by paying someone to do the thinking and show accurate summaries to a CEO once in a while. What Lancia was, more accurately, was a cost Fiat didn´t want to bear and could not afford to give up.
      As for the box-checking, the Delta could plausibly have sold well enough if it had been designed with care and a trivial amount of extra money. It wasn´t – it´s a Fiat sprayed with a thin to absent veneer of Lancia. I am glad it exists but sad it was not much better. I look forward (nervously) to a better expression of Lancia values in the near future.

    4. I find Stradale’s analysis of this Delta model fascinating: On the one hand I can agree with it almost in its entirety. On the other, I think the in-between C/D format of the Delta is brilliant: Not as big as my car (that, if I am completely honest, is just slightly too long) but big enough to provide decent passenger and luggage space. The weirdo size strikes me as very Lancia somehow. I make no comment whatsoever on the execution; others here are far better qualified to comment and have done so.

      As for things like Second Life: Would you like some bread with that circus?

  9. I’m surprised to learn Second Life still exists. That’s a name I’ve not heard in a long time. I also recall about the time of the FCA merger the Delta appeared at the Detroit Auto Show wearing Chrysler badges in place of the Lancia ones. Nothing else came of that, I’d expect because due to size, body style and that face it would’ve been seen as a direct replacement for the outgoing PT Cruiser and would’ve been too expensive for that market position.

    1. Second Life is a bit of an oddball: Philip Rosedale promised something for the mainstream. Those who chose to use it and stick with it gave it a niche that no one else can understand. So, it became a viable and profitable platform that soldiers on, beyond the (questionable) analytical skills of the majority of tech and marketing “experts”.

    2. I remember when the Delta was shown at Detroit with Chrysler badges. Honestly, I loathed the idea of putting Chrysler badges on it. Could it have been viable for the US market, though? I don’t know. If they had bothered to give it something resembling build quality, it might have been a good competitor for the Audi A3 and similar cars. But…

  10. Congratulations Konstantinos on such a well-written article. Very interesting to me because I had only a vague idea of what Second Life was. I still don’t fully I understand it, but that a reflection on me and not on Konstantino’s writing, haha! As for the 3rd-gen Delta, I wanted to like it as when it came out, I was still deep into my Fiat craze era. I owned a Fiat Brava 1.6 103hp that I quite liked and my aspiration was to replace it with a T-Jet Bravo. The Delta, in 1.8 litre 200hp full Poltrona Frau trim was my “if I won the lottery or land a better job” kind of dream, mainly because the too-large-too-heavy Alfa 159 left me cold. Slowly, though, I started to realize that the Bravo/Delta corporate platform was not that great and that I was better off looking elsewhere for inspiration.

  11. Belated but I only just made it to this article – Thank You Konstantinos for this very well written and thought provoking piece.

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