Adams jumped onto the Buzz-Oven network, posting an onlineself-portrait (dark hair tied back, tongue out, goofy eyes for the cam)and listing her favorite music so she could connect with other Toadiesfans. Soon she was heading off to biweekly meetings at Buzz-Oven’s airyloft in downtown Dallas and helping other „Buzzers“ judge theirfavorite groups in marathon battle-of-the-bands sessions.(Buzz-0ven.com promotes the winners.) At her school, Frisco High — andat malls and concerts — she passed out free Buzz-Oven sampler CDsplastered with a large logo from Coca-Cola Inc., (KO) which backs the site in the hope of reaching more teens on their hometurf. Adams also brought dozens of friends to the concerts Buzz-Ovensponsored every few months. „It was cool, something I could bragabout,“ says Adams, now 20 and still an active Buzzer.
Now that Adams is a junior at the University of North Texas at Denton,she’s online more than ever. It’s 7 p.m. on a recent Saturday, and shehas just sweated her way through an online quiz for her advertisingmanagement class. (The quiz was „totally out of control,“ writeclassmates on a school message board minutes later.) She checks afriend’s blog entry on MySpace.com to find out where a party will bethat night. Then she starts an Instant Messenger (IM) conversationabout the evening’s plans with a few pals.
KIDS, BANDS, COCA-COLA
At the same time, her boyfriend IMs her a retail store link to see anew PC he just bought, and she starts chatting with him. She’s alsopostering for the next Buzz-Oven concert by tacking the flier onvarious friends‘ MySpace profiles, and she’s updating her own blog onXanga.com, another social network she uses mostly to post photos. TheTV is set to TBS, which plays a steady stream of reruns like Friends and Seinfeld— Adams has a TV in her bedroom as well as in the living room — butshe keeps the volume turned down so she can listen to iTunes over hercomputer speakers. Simultaneously, she’s chatting with dorm mate CarrieClark, 20, who’s doing pretty much the same thing from a laptop on herbed.
You have just entered the world of what you might callGeneration @. Being online, being a Buzzer, is a way of life for Adamsand 3,000-odd Dallas-area youth, just as it is for millions of youngAmericans across the country. And increasingly, social networks aretheir medium. As the first cohort to grow up fully wired andtechnologically fluent, today’s teens and twentysomethings are flockingto Web sites like Buzz-Oven as a way to establish their socialidentities. Here you can get a fast pass to the hip music scene, whichcarries a hefty amount of social currency offline. It’s where you gowhen you need a friend to nurse you through a breakup, a mentor totutor you on your calculus homework, an address for the party everyoneis going to. For a giant brand like Coke, these networks also offer adirect pipeline to the thirsty but fickle youth market.
Preeminent among these virtual hangouts is MySpace.com, whosemembership has nearly quadrupled since January alone, to 40 millionmembers. Youngsters log on so obsessively that MySpace ranked No. 15 onthe entire U.S. Internet in terms of page hits in October, according toNielsen//NetRatings. Millions also hang out at other up-and-comingnetworks such as Facebook.com, which connects college students, andXanga.com, an agglomeration of shared blogs. A second tier of some 300smaller sites, such as Buzz-Oven, Classface.com, and Photobucket.com,operate under — and often inside or next to — the larger ones.
Although networks are still in their infancy, experts think they’realready creating new forms of social behavior that blur thedistinctions between online and real-world interactions. In fact,today’s young generation largely ignores the difference. Most adultssee the Web as a supplement to their daily lives. They tap intoinformation, buy books or send flowers, exchange apartments, or link upwith others who share passions for dogs, say, or opera. But for themost part, their social lives remain rooted in the traditional phonecall and face-to-face interaction.
The MySpace generation, by contrast, lives comfortably in both worldsat once. Increasingly, America’s middle- and upper-class youth usesocial networks as virtual community centers, a place to go and sit fora while (sometimes hours). While older folks come and go for a task,Adams and her social circle are just as likely to socialize online asoff. This is partly a function of how much more comfortable youngpeople are on the Web: Fully 87% of 12- to 17-year-olds use theInternet, vs. two-thirds of adults, according to the Pew Internet &American Life Project.
Teens also use many forms of media simultaneously. Fifteen- toeighteen-year-olds average nearly 6 1/2 hours a day watching TV,playing video games, and surfing the Net, according to a recent KaiserFamily Foundation survey. A quarter of that time, they’re multitasking.The biggest increase: computer use for activities such as socialnetworking, which has soared nearly threefold since 2000, to 1 hour and22 minutes a day on average.
Aside from annoying side effects like hyperdistractibility, there aresome real perils with underage teens and their open-book online lives.In a few recent cases, online predators have led kids into dangerous,real-life situations, and parents‘ eyes are being opened to their kids’new world.
Meanwhile, the phenomenon of these exploding networks has companiesclamoring to be a part of the new social landscape. News Corp. (NWS) Chief Executive Rupert Murdoch has spent $1.3 billion on Webacquisitions so far to better reach this coveted demographic — $580million alone for the July purchase of MySpace parent Intermix Media.And Silicon Valley venture capitalists such as Accel Partners andRedpoint Ventures are pouring millions into Facebook and other socialnetworks. What’s not yet clear is whether this is a dot-com era replay,with established companies and investors sinking huge sums intofast-growth startups with no viable business models. Facebook, barely ayear old and run by a 21-year-old student on leave from Harvard, has astaff of 50 and venture capital — but no profits.
Still, consumer companies such as Coke, Apple Computer (AAPL), and Procter & Gamble (PG) are making a relatively low-cost bet by experimenting with networksto launch products and to embed their brands in the minds ofhard-to-reach teens. So far, no solid format has emerged, partlybecause youth networks are difficult for companies to tap into. They’realso easy to fall out of favor with: While Coke, Sony (SNE) Pictures Digital, and Apple have succeeded with MySpace, Buzz-Oven,and other sites, P&G’s attempt to create an independent networkaround a body spray, for one, has faltered so far.
Many youth networks are evanescent, in any case. Like one-hit wonder the Baha Men (Who Let the Dogs Out)and last year’s peasant skirts, they can evaporate as quickly as theyappear. But young consumers may follow brands offline — if companiescan figure out how to talk to youths in their online vernacular. Majorcompanies should be exploring this new medium, since networks transmitmarketing messages „person-to-person, which is more credible,“ saysDavid Rich Bell, a marketing professor at the University ofPennsylvania’s Wharton School.
So far, though, marketers havehad little luck creating these networks from scratch. Instead, theconnections have to bubble up from those who use them. To understandhow such networks get started, share a blue-cheese burger at theMeridian Room, a dive bar in downtown Dallas, with Buzz-Oven founderAden Holt. At 6 feet 9 inches, with one blue eye, one brown one, and ashock of shaggy red hair, Holt is a sort of public figure in the localmusic scene. He started a record label his senior year at college andsoon turned his avocation into a career as a music promoter, puttingout 27 CDs in the decade that followed.
In 2000, as Internet access spread, Holt cooked up Buzz-Oven as a newway to market concerts. His business plan was simple. First, he wouldproduce sample CDs of local bands. Dedicated Buzzers like Adams woulddo the volunteer marketing, giving out the CDs for free, chatting upthe concerts online, and slapping up posters and stickers in schoolbathrooms, local music stores, and on telephone poles. Then Holt wouldget the bands to put on a live concert, charging them $10 for every fanhe turned out. But to make the idea work, Holt needed capital toproduce the free CDs. One of his bands had recently done a showsponsored by Coke, and after asking around, he found the marketer’scompany’s Dallas sales office. He called for an appointment. And thenhe called again. And again.
Coke’s people didn’t get back to him for weeks, and then he was offeredonly a brief appointment. With plenty of time to practice his salespitch, Holt spit out his idea in one breath: Marketing through socialnetworks was still an experiment, but it was worth a small investmentto try reaching teens through virtual word of mouth. Coke rep JulieBowyer thought the idea had promise. Besides, Holt’s request was tinycompared with the millions Coke regularly sinks into campaigns. So shewrote him a check on the spot.
By the time Ben Lawson became head of Coke’s Dallas sales office in2001, Buzz-Oven had mushroomed into a nexus that allowed hundreds ofDallas-area teens to talk to one another and socialize, online and off.A middle-aged father of two teens himself, Lawson spent a good deal oftime poring over data about how best to reach youth like Adams. He knewwhat buzzer Mike Ziemer, 20, so clearly articulates: „Kids don’t buystuff because they see a magazine ad. They buy stuff because other kidstell them to.“
What Lawson really likes about Buzz-Oven is how deeply it weaves intoteens‘ lives. Sure, the network reaches only a small niche. But Buzzershave created an authentic community, and Coke has been welcomed as partof the group. At a recent dinner, founder Holt asked a few Buzzerstheir opinions about the company. „I don’t know if they care about themusic or they just want their name on it, but knowing they’re involvedhelps,“ says Michael Henry, 19. „I know they care; they think whatwe’re doing is cool,“ says Michele Barr, 21. Adds Adams: „They let usdo our thing. They don’t censor what we do.“
Words to live by for a marketer, figures Lawson, particularly sinceCoke pays Buzz-Oven less than $70,000 a year. In late October, Holtsigned a new contract with Coke to help him launch Buzz-Oven Austin inFebruary. The amount is confidential, but he says it’s enough for10,000 CDs, three to four months of street promotions, and 50,000fliers, plus some radio and print ads and a Web site promotion.Meanwhile, Buzz-Oven is building relations with other brands such asthe Dallas Observer newspaper and McDonald’s (MCD) Chipotle restaurants, which kicks in free food for Buzzer volunteerswho promote the shows. Profits from ticket sales are small but growing,says Holt.
Not so long ago, behemoth MySpace was this tiny. Tom Anderson, a SantaMonica (Calif.) musician with a film degree, partnered with formerXdrive Inc. marketer Chris DeWolfe to create a Web site where musicianscould post their music and fans could chat about it. Anderson knewmusic and film; De Wolfe knew the Internet business. Anderson cajoledHollywood friends — musicians, models, actors — to join his onlinecommunity, and soon the news spread. A year later, everyone fromHollywood teen queen Hilary Duff to Plano (Tex.) teen queen Adams hasan account.
It’s becoming a phenomenon unto itself. With 20 million of its memberslogging on in October, MySpace now draws so much traffic that itaccounted for 10% of all advertisements viewed online in the month.This is all the more amazing because MySpace doesn’t allow thoseubiquitous pop-up ads that block your view, much less spyware, whichmonitors what you watch and infuses it with pop-ups. In fact, theadvertising can be so subtle that kids don’t distinguish it fromcontent. „It’s what our users want,“ says Anderson.
As MySpace has exploded, Anderson has struggled to maintain theintimate atmosphere that lends social networks their authenticity. Whennew users join, Tom becomes their first friend and invites them to sendhim a message. When they do, they hear right back, from him or from theone-quarter of MySpace’s 165 staffers who handle customer service. AskAdams what she thinks of MySpace’s recent acquisition by News Corp.,and she replies that she doesn’t blame „Tom“ for selling, she wouldhave done the same thing. She’s talking about Anderson, but it’s hardto tell at first because she refers to him so casually, as if he weresomeone she has known for years.
That’s why Murdoch has vowed not to wrest creative control fromAnderson and DeWolfe. Instead News Corp.’s resources will help themnourish new MySpace dreams. Earlier this month they launched a recordlabel. In the next few months, the duo says, they will launch a movieproduction unit and a satellite radio station. By March they hope toventure into wireless technology, perhaps even starting a wirelesscompany to compete with Virgin Mobile or Sprint Nextel’s Boost. SaysDeWolfe: „We want to be a lifestyle brand.“
It’s proof that a network — and its advertising — can take off if itgives kids something they badly want. Last spring, Facebook founderMark Zuckerberg noticed that the college students who make up most ofhis 9.5 million members were starting groups with names like AppleStudents, where they swapped information about how to use their Macs.So he asked Apple if it wanted to form an official group. Now — for afee neither company will disclose — Apple sponsors the group, givingaway iPod Shuffles in weekly contests, making product announcements,and providing links to its student discount program.
The idea worked so well that Facebook began helping anyone who wantedto start a group. Today there are more than a dozen, including severalsponsored by advertisers such as Victoria’s Secret and Electronic Arts.Zuckerberg soon realized that undergrads are more likely to respond toa peer group of Apple users than to the traditional banner ads, whichhe hopes to eventually phase out. Another of his innovations: adstargeted at students of a specific college. They’re a way for a localrestaurant or travel agency to advertise. Called FacebookAnnouncements, it’s all automated, so anyone can go onto Facebook, pay$14 a day, and fill out an ad.
SPARKLE AND FIZZLE
Still, social networks‘ relations with companies remain uneasy. Lastyear, for example, Buzz-Oven was nearly thrown off track when a bandcalled Flickerstick wanted to post a song called Teenage Dope Fiendon the network. Holt told Buzzers: „Well, you can’t use that song. I’dbe encouraging teenagers to try drugs.“ They saw his point, and severalBuzzers persuaded the band to offer up a different song. But suchpotential conflicts are one way, Holt concedes, that Buzz-Oven’scorporate sponsorships could come to a halt.
Like Holt, othernetwork founders have dealt with such conflicts by turning to theirusers for advice. Xanga co-founder John Hiler has resisted intrusiveforms of advertising like spyware or pop-ups, selling only theconventional banner ads. When advertisers recently demanded more spacefor larger ads, Hiler turned the question over to Xanga bloggers,posting links to three examples of new ads. More than 3,000 userscommented pro and con, and Hiler went with the model users liked best.By involving them, Hiler kept the personal connection that many saythey feel with network founders — even though Xanga’s membership hasexpanded to 21 million.
So far, corporate advertisers have had little luck creating suchrelationships on their own. In May, P&G set up what it hoped wouldbecome a social network around Sparkle Body Spray, aimed at tweens. Thesite features chatty messages from fake characters named for scentslike Rose and Vanilla („Friends call me Van“). Virtually no one joined,and no entries have comments from real users. „There wasn’t a lot ofinteresting content to engage people,“ says Anastasia Goodstein, whodocuments the intersection between companies and the MySpace Generationat Ypulse.com. P&G concedes that the site is an experiment, and thecompany has found more success with a body-spray network embedded inMySpace.com.
The most basic threat to networks may be the whims of their users, whoafter all are mostly still kids. Take Friendster, the first networkingWeb site to gain national attention. It erupted in 2003, going from afew thousand users to nearly 20 million. But the company couldn’t keepup, causing frustration among users when the site grew sluggish andprone to crash. It also started with no music, no message boards orclassifieds, no blogging. Many jumped ship when MySpace came along,offering the ability to post song tracks and more elaborate profiles.Friendster has been hustling to get back into the game, adding in newoptions. But only 942,000 people clicked on the site in October, vs.20.6 million who clicked on MySpace in the same time.
That’s the elusive nature of trends and fads, and it poses a challengefor networks large and small. MySpace became a threat to tiny Buzz-Ovenlast year when Buzzers found they could do more cool things there, fromblogs to more music and better profile options. Buzzer message boardtraffic slowed to a crawl. To stop the hemorrhaging, Holt joinedMySpace himself and set up a profile for Buzz-Oven. His network nowoperates both independently and as a subsite on MySpace, but it stillworks. Most of Holt’s Dallas crowd came back, and Buzz-Oven is up to3,604 MySpace members now, slightly more than when it was a stand-alonenetwork.
Even if the new approach works, Holt faces a succession issue that’slikely to hit other networks at some point. At 35, he’s well past theage of his users. Even the friends who helped him launch Buzz-Oven.comare in their late 20s — ancient to members of his target demographic.So either he raises the age of the group — or replaces himself withsomeone younger. He’s trying the latter, betting on Mike Ziemer, the20-year-old recent member, even giving him a small amount of cash.
Ziemer, it turns out, is an influencer. That means record labels andclothing brands pay him to talk up their products, for which he pullsdown several hundred dollars a month. Ziemer has spiky brown hair and around, expressive face. In his MySpace profile he lists his interestsin this order: Girls. Music. Friends. Movies. He has 4,973 „friends“ onMySpace. At all times, he carries a T-Mobile Sidekick, which he uses totext message, e-mail, and send photos to his friends. Sometimes he alsotalks on it, but not often. „I hate the phone,“ he says.
Think of Ziemer as Aden Holt 2.0. Like Amanda Adams, he’s also astudent at UT-Denton. When he moved to the area from SouthernCalifornia last year, he started Third String PR, a miniature versionof Buzz-Oven that brings bands to the ‚burbs. He uses MySpace.com topromote bands and chats online with potential concertgoers. Ziemer canpack a church basement with tweens for a concert, even though theyaren’t old enough to drive. On the one hand, Ziemer idolizes Holt, whohas a larger version of Ziemer’s company and a ton of connections inthe music industry. On the other hand, Ziemer thinks Holt is old. „Haveyou ever tried to talk with him over IM?“ he says. „He’s just notplugged in enough.“
Exactly why Holt wants Ziemer on Buzz-Oven. He knows the youngerentrepreneur can tap a new wave of kids — and keep the site’scorporate sponsor on board. But he worries that Ziemer doesn’t have thepeople skills. What’s more, should Ziemer lose patience with Buzz-Oven,he could blacklist Holt by telling his 9,217 virtual friends thatBuzz-Oven is no longer cool. In the online world, one powerfullynetworked person can have a devastatingly large impact on a smallsociety like Buzz-Oven.
For now, the gamble is paying off. Attendance is up at Buzz-Ovenevents, and if the Austin launch goes smoothly, Holt will be one stepcloser to his dream of going national. But given the fluid world ofnetworks, he’s taking nothing for granted.