The company's making all the right moves as it transitions to the Web, media folks say.
The upcoming launch of America Online's new AOL.com site will need to meet the needs both of users and advertisers to succeed, and early indications are that the company is on the right track with media buyers.
"I'm very optimistic about the opportunity for the portal to be successful," Nick Pahade, managing director of WPP's Beyond Interactive, told ClickZ News. "They've taken the right steps, and they have the opportunity to create something that's interesting and compelling."
The move from a subscriber-based revenue stream to an ad-supported model will not be an easy one. Besides cannibalization issues inherent in giving away content that subscribers were previously paying for, the company faces stiff competition from established portal players like MSN and Yahoo
"In order of consumers to change their behavior, AOL.com will need to be better than Yahoo or MSN in the eyes of users. It doesn't have to be all users; it could be a certain demographic segment," said Jeff Lanctot, VP of media at aQuantive's Avenue A/Razorfish.
AOL is pinning its hopes on broadband content -- both newly created content and the vast archive of licensed and original content it has amassed within the AOL service, on other online properties like Moviefone and AOL Music, and on other Time Warner properties, including HBO, CNN, and Warner Music.
"The key thing they offer is content -- that's always been the opportunity with AOL," Pahade said. "If they're successful in being able to take the content across all their properties, they have something that is fundamentally very powerful, from a consumer perspective and a marketer's perspective. That's always been their challenge as well."
"Ad budgets will follow content and audience -- AOL will have both," said Alan Schanzer, Managing Partner of WPP's MEC Interaction. "AOL.com's broadband offering will have incredible original content, a lot of it home-grown through brands that represent the fabric of our culture."
Another key to user and advertiser success will be leveraging the content and reach of AOL's other online properties to drive traffic. To begin with, the company will make it easier for its content to be reached through AOL Search, AOL Video Search, AOL Instant Messenger and AIM Mail. It will also add a global navigation header across all sites in the network, to convert one-time users of a single site into return users of multiple sites in the network. Sites like MapQuest, AOL CityGuide, and Pinpoint Travel will include more links to each other's relevant content.
"Our goal is to bring in new unique visitors, re-circulate those visitors within the network, and monetize those unique visitors through advertising, search, e-commerce and subscription services," said David Liu, general manager of AOL.com.
Part of that monetization will come from several new ad units AOL will implement when the portal launches. All of the units will comply with standard IAB guidelines, though some will include interactive elements that expand beyond the ads' borders.
While offering innovative ad units are important, what matters more to media buyers is how the ads function. "Some ads are done just because they can be done. If it's just for novelty, they'll struggle," Lanctot said. "They need to strike a balance between user experience and advertiser impact. So far, it looks like AOL is doing that."
Throughout the planning stages of the new AOL.com portal, the company has made a point to improve its relationships with advertisers. The company's efforts to listen to its advertising constituents, through agency and client advisory boards, have been widely lauded.
"They've consistently been honest about where they are within their own technology and targeting schemas and where they want to go. The honesty they've brought to the table is refreshing," Pahade said.
"Probably the best thing they've done is not over-promote. They've set reasonable expectations, and been honest about internal challenges without making excuses," Lanctot said. "Their ad sales teams have been excited, without making any promises. They've tempered the expectations of advertisers, which will put them in a good spot."
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Kevin Newcomb joined ClickZ in August 2004, covering search marketing and other online marketing topics. He has been reporting on web-based businesses since 2000.
Before the bubble burst, Kevin was a marketing manager for an online computer reseller, handling copywriting, e-mail marketing, search marketing and running the affiliate program.
With a combination of real-world marketing experience and years of business journalism, Kevin brings to ClickZ a unique ability to deliver news and training materials that help online marketers do their jobs better.
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