Ken Hayes

Last night I spoke as part of a panel discussion on the effects of the Internet on our children. I gave my take on the forces which encourage kids to use the Internet and my suggestions as to what parents can do to make this positive.

Below is a link to the PowerPoint presentation. I believe there are strong economic forces which drive children to use the Internet. Children use sites like MySpace and YouTube as fun outlets of expression and entertainment. But the force behind these sites is Advertising. Rising advertising value and spending encourages the development of sites which need the most people to spend as much time as possible as often as possible in one place. By this reasoning, MySpace enables (or perhaps tacitly encourages) many young people to sign up, even if they are underage, in order to gain as large an audience as possible.  The site is free, has no age verification, and all your friends are there - how powerful is that?

The second point of my presentation was to offer my suggestions as to how parents can instill good behavior in their children. I included my analogy to sex education, the concept of information persistence, and the values/dangers of World of Warcraft.

The best part of my presentation was in fact the questions/comments from other parents. Most parents recognize that they cannot control completely their children’s use of the Internet (and at best, only in their own home). Stories came out of children changing the clock in the PC, disabling monitoring programs, etc. Kids are smart. Parents are just trying to keep up with what their kids figure out.

The most relevant comment of the night was from a mother who said that parents need to maintain communication among themselves, to share experiences and understand what each others’ kids are doing. Yup, the Internet is no different from every other new fangled innovation society has adopted in each generation. Rock’n'Roll in the 50’s anyone?

InternetAdvertising2007 PowerPoint (524 KB)

Now my 8-year-old daughter has fallen into the same trap as her older brother who’s addicted to World of Warcraft.  She’s hooked on Club Penguin  – admittedly, just about the cutest world of animated penguins and casual games I’ve ever run across (and certainly which has ever come out of Kelowna, British Columbia, a small town four hours drive north of Vancouver).

It was recently written up in the Wall Street Journal:
http://www.clubpenguin.com/parents/downloads/How-young-is%20too-young-for-MySpace.pdf

Launched in October 2005, but really marketed since March 2006, Club Penguin is now up to several million unique visitors.  Registration is free and requires a parent’s e-mail address.  Games are free and you rack up points for playing.  You design your own penguin and igloo.  You can get a pet Puffle and spend points buying it food.  I have checked out their Internet safety information and am reasonably confident it’s fine for young kids.

Here’s the business model:  Revenue does not come from advertising.  How much discretionary income does an 8-year-old have? Just loads of influence.

Rather, a paid subscription on a parent’s credit card is $6 monthly or $58 for a one-year commitment.  This is about half my daughter’s allowance, which she’ll have to fork over to me, and will at least cut into her candy buying.

When I was 8, I had no concept of buying services, let alone the means.  I barely understood Monopoly, and that money was fake.  If I had a subscription to anything, it was Popular Science or Weekly Reader.  This young generation is learning how to create an online identity, interact with others they cannot meet, budget their resources (real or virtual), and create their own entertainment.

And judging by the number of off-line phone calls my daughter makes to coordinate meeting her real friends in her virtual world, she’s also saving gasoline and my time driving her to playdates!  (okay, that’s just a rationalization…)

Parents worried that their teenagers are getting sucked in to MySpace can now relax – MySpace has been declared “unhip” by teens in a Washington Post article.  This was inevitable, as this fickle audience moves on to something more exciting.  But it raises two important questions for parents and advertisers:

1.  Given that parents must worry about something, where are their teens going now?
It looks like Facebook is picking up a lot of teens.  This makes sense as they are maturing, going to college, and Facebook has traditionally been more college-friendly (and Facebook also has minimally more protection to ensure a user’s identity.)  But even so, there are other sites filling the gap.  Too early to see which ones will succeed, though.  By definition, if a 40-something like me could see it, you know it would be wrong!
 
Some movers, accoring to the Wahington Post article:
Going out:  MySpace.com, Xanga.com, Friendster.com
Coming in:  Facebook.com, Snapvine.com, PLyrics.com, Picgames.com

2.  Will MySpace still become a valuable advertising medium, and thus profitable for News Corp after spending $580m?  Just because the early adopters (teens of 2005-2006) are moving on, MySpace is still allegedly signing up 300,000+ people per day.  Will the late adopters and laggards, ironically, be more valuable than the teens?  My estimate is yes. 

Here’s why:  much of Internet advertising is not relevant to a 15-year-old – they cannot get a credit card, they don’t need a mortgage, they probably won’t buy a new car.  They might apply to a college and want to download a ringtone, and they’ll definitely see movies.  But there are entire sectors of advertising they ignore.  This is why MySpace to date has not been profitable – it has not yet hit on the advertising which their users value. 

Once Moms and Dads, grandparents, boring professional adults, etc. start using MySpace, the advertising value should rise.  It will be hip to be square.  Or at least profitable.

Watch out for a job-hunting / education lead-gen scam making rounds again.  If you’ve posted your resume on a job board like Monster, Yahoo HotJobs, etc. (and who hasn’t, in this biz?), you’ll soon receive a personalized e-mail from www.instanthumanresources.com describing an open position from “Vector Point Solutions” or similar.  To apply, just click on the link to fill out a form on the Instant HR site (which basically won’t allow you to do anything else except register for this job).  And wait for a reply, which never comes.

Where does the education lead generation come in?  Clue:  at the bottom of the form is a choice requiring a selection:

Instant HR has found that employers constantly name education as one of the top three factors in determining whether to hire someone. If you are serious about your career and your education we have compiled a list of some of the top universities in your area that can provide you with free information. Instant Human Resources has no direct or indirect relationship with these universities.

- I would like to find out more about educational opportunities. (Please only select if you are serious about exploring educational opportunities)

- No, I do not feel additional education would benefit me at this time (Not receiving information will in no way affect your ability to post your resume or receive offers on our site)

I’m betting that the job does not exist, and the application is a ruse – meant purely to get job hunters to enter their contact info and have their lead sold to for-profit educational institutions.   I doubt the schools sanction this method and have no idea where the leads come from – probably via an affiliate network.  Say the lead is sold to 3-4 schools; that’s anywhere from $50-$100-$150 in revenue to the lead-gen company.  Users who apply might also end up on other e-mail lists and lead-gen offers.

A good example of traffic arbitrage, but with bad ethics.  Instead of buying traffic (e.g. users) using banner ads on Hotmail, say, Instant HR buys or harvests names and e-mails from the online resume sites.  They convert a percentage of these into education leads and make a profit if the conversion % is high enough.  Their website looks just legit enough that they’re able to buy leads from the job sites (who after all, also make money selling job seeker leads).

Think the job application is still legit?  See if you can find the Vector Point Solutions “employer” in Google:
www.google.com/search?hl=en&q=%22vector+point+solutions%22

Read what others have to say on Scam.com:
www.scam.com/showthread.php?t=17166&highlight=vector+point
www.scam.com/showthread.php?t=7675
This has been going around for about a year under different guises.

As GM of Degrees.com, one of our primary goals was to professionalize the education lead-gen industry.  There are plenty of good, professional lead-gen companies out there who serve a legitimate need to find prospective students for schools, but examples like this show there is still a lot of junk.  These guys poison the well.

My advice?

• Don’t include too much personal info in your online resume posts; assume it will get into the “wrong” hands.
• Don’t submit further information on a job site unless you are confident the site is legit.
• Watch out when ticking a box for more information; you’re giving permission to be contacted for a variety of unrelated offers.

“Surfer Beware”