Tagged.com VCs Bet They Can Own Teens-Only Social Media

I interviewed tagged.com's CEO Greg Tseng yesterday. The PR person was also on the phone, and there were times when Tseng lapsed into PR speak that sounded very much like he was reading stuff she hurriedly emailed him in response to my questions. Why do PR people do that?

Tagged, which limits membership to teens 13-19, is lively, busy, and full of options for teens. But the site design is kinda ugly and dark.

Possible Security Problem: I Signed Up My Dead Dog
There might, ahem, be a little bit of a security problem on the site. Apparently it is still true that on the Internet, nobody knows you are a dog. Even if you are a dead dog. I signed up using the name of my dear departed Labrador, Sammy, and was instantly accepted, as you can see.

Tagged Grows Virally
Tagged and MySpace appeal to what Businessweek has called, "Generation@," the first generation to grow up "fully wired and technologicaly fluent," and using the Internet to estabish their social identity. Launched in Nov 2004, the site achieved one million users in 12 months and then took only three months to get to two million members through viral acceleration.

Tseng says the large and lucrative market for online teen media and advertising is still hugely underserved. Tagged has identified 15 vertical markets, including music, TV, fashion, mobile, healh, and automotive that "high quality brand advertisers" it wants to attract can target. They are going after big brands becausethat's who spends big bucks.

Big Opportunities for Advertisers, If They Ever Get a Clue
The thesis of the business, Tseng says, is that teens use 35% of their media time online, yet teen advertisers only spend about 3% of ad budget online. Clearly, he says, consumer behavior is leading the advertising trend and "there will be big winners and big losers when advertising catches up." The question will be: how to get teens to part with their huge amounts of discretionary cash.

Banners Allowed If Advertisers Want Them
Tseng believes that "today's teens are very interested in brands and finding out about new things," but savvy about being advertised to in an interruptive manner.

Tagged.com advertisers will be encouraged to sponsor areas of the site and sponsor features. "Some advertisers will undoubtedly use flashing banners and we will give em banners if they want them," he says. "but I think the most successful advertising will be interesting and immersive." Product placements will be ubiquitous, as will sponsorships of sections on the site, according to Tseng.

MySpace doesn't allow view-blocking pop-up ads, or spyware. In fact, the advertising can be so subtle that kids don't distinguish it from content, an approach tagged also plans. Look for product placements throughout the content.

I kept waiting for Tseng to mention that some segment of the site would point teens toward social responsibility, or reward their creativity. But tagged's only goal seems to be to set up a lucrative platform for advertising sales. Seems like there are a lot of missed opportunities here and plenty of room for clever competitors to do something more than narrow the MySpace formula down to one age group.

Many Pioneers Will Be Shot
It'll be interesting to see how teens respond to aggressive brand advertising. Madison Avenue doesn't get the Internet yet, and I think a lot of pioneers will get shot as advertisers learn the long and hard way that the days of intrusive, obnoxious advertising are really over. Tagged has a lot riding on that lesson being learned sooner, rather than later.Teens have an even lower bullshit tolerance than adults yet Madison Avenue seems to have learned little from trying to sell us.

Online Safety is "a Hairy Area"
Safety precautions are, Tseng says, "definitely a hairy area and in many ways the number one issue." He says many safeguards are in place and they'll will have more to say in a couple months.

Users police themselves pretty well, Tseng says. The site has "report this" buttons where users can report offensive content. And users will soon be given more choices of levels of privacy for their information.Tseng says all content is moderated by their general counsel and a staff of four customer service agents who report to the lawyer.

Embargo?
I also was asked to embargo information about the $7 million in VC money they've raised until Feb. 8th, even though it's been public record since Jan 24. Don't know what that's all about. Why do PR people do that? But I'm sure it must be nice to be running a startup with millions in the bank.

Comments

Posted by: chelsey at April 9, 2007 5:21 PM

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