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Multimedia Formula Makes Alloy a Teen Magnet

Company Behind 'Gossip Girl' Kicks Off Move Into Web Video, Wins LG Mobile as Sponsor for 10-Episode Drama

Wall Street Journal
Emily Steel
February 27, 2009

Alloy Media + Marketing is emerging as an unlikely star in the online teen-popularity contest.

The New York company behind the "Gossip Girl" book-turned-TV series and the "Sisterhood of the Traveling Pants" book-turned-movie series has become a significant force on the Internet.

By one reckoning, the company's network is the hottest teen-oriented property on the Web, based on unique visitors. Now, Alloy is moving into Web video. It plans to announce Friday the debut of TV.

Over the past few years, Alloy has established a reputation on Madison Avenue, in Hollywood and in the publishing world for its savvy in connecting with young people. The small Nasdaq-listed company, which was established in 1996, operates a marketing agency, media properties ranging from in-school TV network Channel One to a college newspaper network, and an entertainment company that develops and produces original books, TV programs and feature films.

"Teens today cannot be reached purely through TV. Their attention is divided through so many different media," says Ehtisham Rabbani, vice president of product strategy and marketing for LG Electronics' LG Mobile, which has worked with Alloy on youth-marketing promotions. "Alloy, with all of its networks, delivers strong results."

Alloy has sought to create an online hub -- beyond social-media sites -- where marketers can reach teens, says Jamie Elden, Alloy's vice president of digital and branded entertainment. The network includes sites that Alloy owns -- like itself -- social-networking site and online retailer, as well as outside properties, such as online applications maker and virtual world

The network attracted six million unique U.S. visitors in January, up 13% from 5.3 million a year earlier, according to market tracker comScore.

ComScore ranks No. 1 among Web sites that contain information geared to teens. But comScore puts several other media companies with a teen focus in other categories.

Disney Online, which includes the Web properties for franchises such as Hannah Montana, High School Musical and the Jonas Brothers, attracted 30.3 million unique U.S. visitors in January, but comScore considers it part of the "family group." MTV, which attracted nine million unique U.S. visitors in January, falls in the music category.

Alloy, which estimates its revenue for the fiscal year ended Jan. 31 at between $215 million and $220 million, faces some serious challenges. Media companies have had a hard time holding on to the fickle teen audience of the Internet age as social-media Web sites have emerged, attracting millions of users.

In the past few years, nearly all magazines aimed at teenage girls have been scaled down or axed, including Time Warner Inc.'s Teen People, Hachette Filipacchi Media's Elle Girl, Hearst's Cosmo Girl and Condé Nast's YM.

Digital efforts have also proved to be bumpy. CondeNet, the digital division of Condé Nast, launched, a Web site for teenage girls, to create "flip books," multimedia scrapbooks of photographs, homemade music videos and other postings. CondeNet hoped the site would be its answer to MySpace -- which is owned by Wall Street Journal publisher News Corp. -- and Facebook, but it never took off, and ultimately folded.

Alloy, meanwhile, has drawn its share of criticism, particularly from groups who oppose advertising to kids. Alloy says it follows the same guidelines as other major media organizations that market to children.

Now that Alloy has built up its teen hub online, it plans to produce a number of Web video series, several based on Alloy entertainment properties that already have a following. It will promote them through its network, both in traditional media and online. In addition to typical online ads, Alloy is linking up with a single marketer to sponsor each of its shows and weave its brands into the episodes, Mr. Elden says.

LG Mobile has signed on as the first sponsor for a show on Alloy's video network, underwriting the production of a teen drama called "Haute and Bothered." The show, which includes 10 4½-minute episodes, was developed through a partnership with United Talent Agency, and will depict characters in the series using LG Mobile phones.

LG Mobile plans to place ads on sites hosting the videos. The brand also will be featured in 30-second promotions for the show on the Channel One network.





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