AOL has named Dave Morgan, who joined the company through the September acquisition of Tacoda, to a global advisory and communications role. As EVP of global advertising strategy at Time Warner’s morphing portal and ad network unit, Morgan’s duties include courting Madison Avenue, building partnerships in the U.S. and abroad, and making sure AOL’s internal divisions support the company’s core display ad business.
“AOL does not have a search business,” he told ClickZ today. “The display ad business is our present and future. We need to move from reacting to it to leading it… There’s no reason why, as everyone else tries to build the display business, we can’t own the display business going forward.”
Accomplishing that task will mean striking further partnerships in the U.S. and overseas, including perhaps other acquisitions. The company has been among the most acquisitive Web giants, especially when it comes to ad networks. The company’s numerous network acquisitions include mobile ad seller Third Screen Media and, most recently, Quigo.
The road to complete reliance on display advertising continues to be a rocky one, however. During AOL’s earnings call this week, executives said weakening demand in the display market had put downward pressure on ad revenues.
“We now expect advertising growth in the fourth quarter to grow at a lower rate than we experienced in the third quarter,” CFO Wayne Pace told investors. Compared with AOL’s own sites, third-party sales through its Platform A network business are relatively healthy, growing 21 percent year over year.
Ironically, large ad networks such as AOL’s own Advertising.com and those run by Google, ValueClick and Specific Media are contributing to the weakness, as they make large amounts of inventory available to advertisers at low cost.
“[Network growth] has softened what was the CPM display business,” said Morgan, who insisted the market will grow enormously in the future. He suggested that growth will be driven in part by a resurgence of creative thinking and planning as values.
“You need to have people creating ads. You can’t have machines doing it all,” he said. “The human aspects of advertising online are things we can do well with.”
Morgan won’t hold the reins of the horse he rode in on. Tacoda now resides within AOL’s Platform A division, which also houses LightningCast, Advertising.com and Third Screen Media. Eventually it will also absorb Quigo. That division is now led by Curt Viebranz, who took over as Tacoda’s CEO in 2006 when Morgan gave up operational oversight of the firm. Both Viebranz and Morgan report to AOL President Ron Grant.
Morgan plans to build a small team, but will not have direct responsibility for any large groups or divisions within AOL. Rather he’ll have the ear of executive management and focus much of his attention on would-be partners and ad clients.
“Communications is a big part of it… internally as well as externally, especially with Madison avenue, which is going to be critical,” he said.