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Cracking the online market -

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Cracking the online market

Broadcast: 02/04/2008

Reporter: Kirsten Murray

Social networking sites such as Facebook and MySpace are continuing to grow and advertisers are
scrambling to find ways to crack this lucrative market. 7.30's Kirsten Murray reports.


KERRY O'BRIEN: There was a time when the local community hall served as a place for friends to
catch up and share stories, or the local pub, or even across the back fence.

But, of course, with the advent of the Internet a lot has changed - computers allow people to
socialise with anyone around the world at any time without leaving home.

Websites like Facebook and MySpace offer a place to create online profiles, chat on message boards
and share photos and videos. The take up over the past year has been huge and big business is
paying close attention.

These sites not only boast hundreds of millions of members worldwide, they also attract an elusive
market made up of teens, young adults and disposable incomes.

It's a market ripe for advertising, by just about any means that might get the consumer message

Reporter Kirstin Murray explores one method that, for now, seems to be working.

KIRSTIN MURRAY, REPORTER: Welcome to the world of online drama, where reality and fiction blur,
where characters feel real, and where viewers can decide how the story unfolds. Online serials are
a growing form of youth entertainment, and that's got the advertising industry very excited.

MAN: The younger demographic are not watching nearly as much TV. So all the advertisers are
panicking and they're working out new ways to connect with audiences.

JIM SHOMOS, ONLINE CONTENT CREATOR: These shows will be funded by brands primarily, virtually
cutting out networks.

TARA RUSHTON, ACTOR, 'KATE MODERN': The Internet is kind of, quite uncensored for things like that.
You can have product placement, you can be blatantly talking about products in a way that gets
people to get up and take notice of it.

KIRSTIN MURRAY: For Melbourne based comedy drama "Forget the Rules" the narrative unfolds in three
minute episodes which are posted online or sent to mobile phones.

JIM SHAMOS: The viewer has control now. You're free to watch what you want when you want when it
suits you. For content makers, the freedom is that we get to make content that we believe in and we
don't have to bow to other people's tastes or filters in this country, or anywhere else. So that
freedom is just powerful, and brands are starting to get that.

KIRSTIN MURRAY: Producer Jim Shomos can thank the rise of social networking sites for his show's
success. MySpace, Facebook and YouTube have helped foster a new genre of storytelling, as users
flood the Internet with videos. Most posts soon disappear into cyber space, but last year, a
blogger in America caught the attention of tens of millions of viewers worldwide, who thought her
confessional style diaries were real.

(Excerpt from "Lonely Girl 15")

BREE: Since Dad banned Daniel from the house, this is our only way of communicating.

(End excerpt)

KIRSTIN MURRAY: It was all a con. Lonely Girl 15 as she's known online was acting out lines in a
highly scripted drama. But it didn't matter, fans were hooked and kept logging in for their daily
fix of teenage drama.

(Excerpt from "Lonely Girl 15")

BREE: A lot of you think that Daniel and I should reconcile. I completely agree with you.

(End excerpt)

KIRSTIN MURRAY: Since the show began 18 months ago it's had nearly 80 million views worldwide and
so emerged the business plan which offered tantalising commercial opportunities for the show's

MILES BECKETT, ONLINE CONTENT CREATOR: And then the next step was to build a business out of that.
Part of our business model was to create international spin-offs and it was a chance to extend the
"Lonely Girl 15" universe, create another show and then really prove the business model of
advertising and online serials. It's very well framed.

KIRSTIN MURRAY: Creator Miles Beckett launched his second series this year. London based "Kate
Modern" is another fictional drama which styles itself on reality.

MILES BECKETT: We treat these characters as if they're real people, even though people know it's
fictional. They live in the real world and it makes sense for them to interact with real brands.

(Excerpt from "Kate Modern")

KATE: I had a bit of a fright this weekend. I didn't want to speak about it until now. You know we
were careful, but I was late. Anyway, I can't tell you how excited I was to see these babies this

(End excerpt)

TARA RUSHTON: Having products such as tampons, it can be a difficult product to integrate. For me I
actually didn't mind. I thought that was quite a funny video. It's not like blatant advertising
which is a difficult thing to do sometimes.

KIRSTIN MURRAY: While advertisers here have been slower to see the potential, Jim Shomos found the
success of overseas serials helped secure backing for his latest series.

JIM SHOMOS: On the one hand we'd rather have 80 per cent of our freedom and be able to get this
show on air with brand involvement than not get it on air at all.

KIRSTIN MURRAY: To secure a third series, the "Forget the Rules" team have begun pitching to
advertisers, highlighting the potential of product placement and showing just how easy it is to
integrate brands into storylines.

(Excerpt from "Forget the Rules")

MALE ACTOR: Oh look, I haven't got time for this, my favourite show is on.

FEMALE ACTOR: Oh what, the 7.30 Report?

(End excerpt)

KIRSTIN MURRAY: But cyberspace watchdogs have called for industry regulation as more producers go
down the path of incorporating brands into online entertainment.

DAVID VAILE, CYBERSPACE LAW, UNSW: When you have products and advertisements embedded like this
there's a danger that all those critical facilities that normally stop you from being seduced or
tricked by advertisements may be not operating properly.

KIRSTIN MURRAY: Content makers say it's their audience that keeps them in check.

MILES BECKETT: We self regulate a massive amount so, you know, we haven't done any integrations
with anything that we feel there could be concerns with or sensitivity about.

KIRSTIN MURRAY: Capturing a market that rejects traditional methods of advertising is one selling
point of these shows, but their ability to keep that audience is what makes them stand out.

DAVID VAILE: In order to keep people sort of sucked in and stuck to the system, the more
interactive and sort of exciting and involving they can make it, the better.

MILES BECKETT: That character will go online and talk to the fans or will meet with the fans in
person at a live event and we'll actually plan how that will occur as part of the narrative.

KIRSTIN MURRAY: With new episodes uploaded each day dramas like these deliver a committed audience
and that's just what social networking sites want.

DAVID VAILE: There's all this user data about the people in it that starts to look like dollar
signs in the cash registers of the system operators.

KIRSTIN MURRAY: Rupert Murdoch was quick to see the commercial potential of social networking sites
when he bought MySpace two and a half years ago for $580 million US.

You see, user profiles can be mined for information, and these companies don't only have access to
basic data like a person's age or home town, but also personal interests, like music tastes or
favourite films.

And if you've made a purchase online, these sites can find out and they may even take the liberty
of recommending those products on your behalf to your online friends.

But corporations walk a fine line, and like the owners of Facebook recently discovered, risk losing
their audience if they push advertising too far. User backlash forced a backdown from the company's
advertising strategy and an apology. A lesson for all online entrepreneurs out there.

JIM SHOMOS: It's really easy just to click off and not go back again and not only that, but really
easy to tell thousands, hundreds of their friends who tell hundreds of their friends really
quickly, this show's become a joke, turn off.

KERRY O'BRIEN: Kirstin Murray with a bit of food for thought on the net.