Armstrong: AOL Ads Are Not 'Laser-Focused on Social'

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AOL ads aren't going to mimic Facebook's social context ad units, Sponsored Stories, any time soon. Based on AOL CEO Tim Armstrong's comments at TechCrunch Disrupt today in New York, his company seems to be heading in a different direction when it comes to social advertising.

"This might be sound controversial," he said. "We are not as laser-focused on social as you probably think we would be at this point… The social marketplace for what it is today is good at a certain amount of things. Our products and services just happen to be targeted in a different way. I think if there's one core strategy we are going after, it is turning advertising into content."

With the last remark, Armstrong was dovetailing into how Huffington Post, an important AOL property, wants to work more closely with brands on building websites, curating content, and distributing information to consumers. HuffPost aims to get its advertisers on a hosted content management system, theoretically further monetizing the online publisher.

"We really want to provide content management systems for our brands to be publishers," Armstrong said. "And I think that feeds into how you publish socially."

Armstrong noted that his New York-based company was interested in developing ways for brands to better combine content with advertising, citing a recent effort to promote "Hunger Games," a Lions Gate film production that leveraged AOL's local Patch properties.

"When we think about advertising," he said, "we think about: 'How do advertisers publish information socially using technology and scale?'"

Meanwhile, AOL's CEO wasn't afraid to talk Facebook, which performed poorly as a stock today for the third consecutive day in its three-day Nasdaq history. Armstrong said he's visited 40 to 50 brand customers in the last month, stating that "social was a big topic" for advertisers.

He said, "I think Facebook has done a really good job with the first generation of basically having a flywheel set up for advertisers, saying, 'You have a certain amount of fans. Those fans convert at a certain level. And that conversion turns into some kind of commerce.' I think there's an opportunity for Facebook to develop a second-generation ad model. I wouldn't be surprised to continue to see Facebook innovate."

Even if AOL wanted to create social context ads like Facebook's Sponsored Stories, would it have the data to do it? TechCrunch writer and panel moderator Josh Constine put the question to Armstrong, who answered, "I think as an Internet company we probably have the most data east of the Rockies. We are not deprived."