EDINBURGH: Edinburgh TV Festival delegates this week packed the the International Conference Centre to learn how an online teen soap phenomenom is expropriating their coveted ad revenues.

The villain [hero?] of the piece is San Francisco-headquartered Bebo, a social networking website that operates in six English-speaking nations: the US, UK, Ireland, Canada, Australia and New Zealand.

In the UK 10.7m young Britons have signed-up to Bebo, whose online interactive teen drama KateModern registered around three million hits in the three weeks since it began airing - achieved without a single penny of promotional spend.

A video blog-style teen drama [endearingly amateurish in production values but with confident performances that would not disgrace a high-ticket BBC or ITV soap], KateModern is screened in two-minute episodes five days a week.

It portrays the rollercoaster life of a struggling London art student and her friends.

KM is the brainchild of Joanna Shields (45), former managing director of strategic partnerships at Google Europe and now Bebo's president international.

Earlier this summer she enticed executives from thirty multinational brands to an advance screening. Of those present, Procter & Gamble's Gillette, Tampax and Pantene brands signed up - as did MSN, Orange Mobile, Paramount and Buena Vista

Each pays around £250,000 for six months of name-checking on the show. Product placement is discreet and there are no pre-roll commercials, which research shows can irritate and deter viewers.

"The connection of the character to the community is amazing,'' Shields said. She told delegates that feedback from users is sometimes used to inform plots and storylines, while Bebo staff masquerading as KateModern characters reply to viewers' emails.

Asked if he feared competition from the likes of the BBC, KM's producer, Greg Goodfried (28), replied: "We're not afraid of the BBC. We are afraid of the two 13-year-old kids in their bedroom who are going to come up with the next thing."

Data sourced from Telegraph.co.uk; additional content by WARC staff