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Best of Web: Let the Web entertain you

By Sarah Lacy, BusinessWeek
September 29, 2006 09:10 IST

Meet Andy Oglesby. He's a 40-year-old graphic designer who lives in San Francisco and spends most of his waking hours online. It begins at work, where each morning he hits a tab on his browser that opens some 20 sites and blogs. He'll read, browse, and sift through them, on and off, pretty much all day.

Here's the thing: Only about one-quarter of the sites are strictly work-related. And the non-work-related surfing continues well into the evening, when he's at home. There, he and his longtime, live-in girlfriend spend many weeknights together on the couch, TiVo on, notebooks on laps, surfing the Net. They've even been known to instant-message each other things like, "What's for dinner?"

Oglesby is one of a growing number of people spending long stretches on the Net, searching for amusement, often with no destination in mind. Indeed the tendency to use the Web more for play than work -- to find entertainment and not just information -- is surging. According to the Pew Internet Life Survey, on any given day, 40 million Americans go to the Web for no particular reason, just to pass the time. The total almost doubled from 2004 and experienced "striking growth" in the last year, Pew says.

Not just for kids

In fact, Pew has found that more people are entertaining themselves via the Web than buying things, despite the successes of eBay, Amazon, and other e-commerce players. If the Internet was already a virtual post office or library, it's now a virtual "destination resort," Pew says.

And as Oglesby demonstrates, the trend isn't just for youth. The quest for online amusement cuts across all races and income and education levels. Make no mistake -- the younger the user, the more time they're likely to spend entertaining themselves online. But 20% of all Internet users over 65 go to the Web every day just to amuse themselves, according to Pew.

Even sites typically associated with teens are playing to a wider audience. Who knew that 10% of MySpace users are older than 55 -- and that the proportion of MySpace users in the 12 to 17 range has dropped to 17% from 22% in the year through May? More than one-third of Facebook users are older than 35, and more than half of YouTube's faithful are between 35 and 64, according to a study by eMarketer.

Revolution now

That the Web has become a hub of entertainment is no shocker, of course. What's been more of a surprise is just how quickly and extensively the Internet is replacing traditional content over consumer electronics devices like TVs and PCs outfitted with media-compatible software and hardware. Computer makers like Hewlett-Packard and software giants like Microsoft long hoped they'd play a bigger role with so-called media center PCs.

But the Internet entertainment revolution has largely taken a different path. More consumers are getting amused straight from the Web, right on the PC. In part, that's thanks to the proliferation of faster Internet connections and technologies like wireless fidelity, or Wi-Fi, that provide all-over access. With a robust, always-on connection, downloading even the fattest files is less of a chore.

It doesn't hurt that just about anyone can create their own content and spread it around the Web like wildfire. YouTube is serving up 100 million videos a day, much of it original skits, lip-synched numbers, and Web "soap operas" filmed by amateurs at home.

Even getting news and information online has taken on elements of social networking and entertainment. Consider the success of blogs such as Gawker, citizen journalism news sites like Digg, and digital directories like Yelp, where thousands of everyday people write frequently creative and funny reviews on everything from their accountants to hot new clubs.

Big media moves

Now, big media is responding fast, whether it's Warner Bros. striking deals to deliver content via BitTorrent and YouTube or decisions by Disney's ABC and other providers to post

shows online, sell them via Apple's iTunes, or even make them available early through Netflix. Everywhere you look, new entertainment options are swirling around Web surfers. Getting online for fun is the most popular activity on the Web, after sending and receiving e-mail and conducting searches through engines, according to Pew.

As popular as online entertainment has become, advertisers have yet to get with the program. eMarketer will report the week of Sept. 25 that U.S. Internet advertising will grow more than 33% in 2006 from a year earlier, the fastest pace this decade. But even with more than $16 billion now spent advertising online, companies will spend a mere $280 million on social networking and user-generated content sites. Meanwhile, nearly half of the spending goes to search-related advertising.

Marketing lag

If advertisers seem too risk-adverse, remember it took nearly a decade for them to get comfortable with easy, relatively cheap, and measurable paid-search ads. And only in the last few years have more traditional banner and display ads, which have more a fuzzy aim, like promoting a brand, come back into vogue.

Advertising on sites that specialize in social media and user-generated content is trickier. On sites such as MySpace, where companies post profiles of fictional characters or cars, they're generally tricking or bribing kids to spend some of their social time getting pitched.

And success isn't just getting your name in front of them, it's getting the online community buzzing about your product or promotion, turning them into marketers. Try too hard, and risk getting called out by these sites' vocal and sometimes cynical communities. Post a fake profile of an attractive girl who loves, say, the new Ford Taurus at your own risk, Corporate America.

That's a risk that many companies aren't yet willing to take. Big advertisers don't fully appreciate the breadth and depth of the Internet-as-hangout trend, says David Hallerman, senior analyst at eMarketer.

"With all kinds of Internet advertising, there's a real lag between the reality of who the audience is and who companies think it is," he says. "More often they lean toward thinking the audience is younger." So far, the biggest advertisers to experiment with social media and user-generated content sites are Hollywood studios and carmakers.

How to advertise

Still, ad spending on sites that specialize in social networking and related activity is set to grow, as such sites attract larger audiences. eMarketer expects, in the next four years, nearly $2 billion will be spent on these sites, in an effort to get all those people hanging out online buzzing about new shows, products, or services. Boutique agencies are even popping up to specialize in marketing via the new social media.

Ian Schafer was vice-president of new media at Miramax Films a few years ago and was increasingly looking for ways to promote new movies via the Web. None of the interactive agencies he interviewed really got the social networking, user-generated content phenomenon. So he started his own firm, Deep Focus, to specialize in using these kinds of sites to build buzz.

He says the keys are being transparent that a profile page for, say, a TV show is being put up by that TV show with a vested interest. But, other than that, there are few rules.

One recent campaign for HBO's series Entourage had kids on MySpace creating profiles of their own "entourages" and vying to see who could rack up the most friends. HBO gave the winning team cars and flew them to Los Angeles to live the life of the show's stars for a week.

Another example was a MySpace campaign for the movie Clerks 2. The first 10,000 people to add Clerks 2 as a friend got their names in the film's credits. Over six hours, more than 180,000 people befriended the film, and many of them saw it in theaters just to see their names on the big screen.

"To influence them, we need to understand their behavior online," Schafer says. "This is just an extension of social interaction that's been going on; now it's nonstop; and as advertisers and marketers, we need to take advantage of that."

The sites themselves are leery of awaking a vocal uprising if ads are too obnoxious or intrusive. It's an issue sites such as Facebook, Digg, and YouTube are still trying to figure out.

They have a potent model in Google. For a long time, the Web search giant had mass users, but lacked a business model. Then the world caught on to the potential of ads related to search. Just wait till it grasps what most folks are doing online now.

Sarah Lacy, BusinessWeek