New AOL Gambit Could Undermine Premium Content Goals

For months, AOL has stressed its mission to offer advertisers premium content. But its latest big plan to launch an algorithm-based system for churning out crowd-sourced editorial content could undermine that goal.

Following the Web’s larger shift toward harnessing and monetizing user data, AOL plans to analyze the information it gleans on user behavior and ad sales to determine which subject matter to cover, and when. According to a Wall Street Journal report published Monday, AOL will launch the system later this month.

At first glance, the plan seems promising for users and advertisers. If it works the way it should, it will result in more relevant content for both parties. It could also help AOL capitalize on user and advertiser demand for certain types of content, creating more ad impressions associated with timely topics. Reportedly, AOL will also make data-driven, custom advertorial content available.

While AOL clearly aims to score more ad dollars through the initiative, an AOL spokesperson said the goal at launch will be to generate contributions from writers, photographers and videographers. However, the content won’t necessarily be written or produced by the in-house editorial staff AOL has touted as key to achieving its premium, branded content mission. It will come from a pool of thousands of freelancers, organized through a platform the company calls SEED.

SEED is “an exciting and innovative new platform that will allow writers, photographers and videographers to participate in creating great content across AOL’s network of industry leading websites,” according to the Seed.com site.

“There are a handful of advertisers that look for mass reach and look for custom content and those folks will be interested in this,” said Josh Palau, VP of SEO at Razorfish. For example, he suggested, a brand like Johnson & Johnson might want to sponsor content describing “Six ways to help your baby sleep through the night.”

AOL’s efforts to solicit new freelance contributors to help fuel its data-driven editorial project seems at odds with its stated intention to equate the AOL brand with high quality content. In July, during his much-anticipated meeting with AOL staff capping his first 100 days as AOL CEO, Tim Armstrong stressed that the firm must focus on improving the quality of AOL content in order to attract higher ad prices. Since then, the company has continued to stress its dedication to publishing premium content as an important component of its business going forward.

The project has already been likened to services such as Demand Media and Associated Content, companies that pay freelance contributors relatively small fees to crank out video clips and articles. On average, Demand Media pays $15 per article and $20 per video clip, according to a recent Wired article about the company. Associated Content pays between $1 and $20 upfront plus performance-based payments for pageviews generated by content, according to its Web site. (Armstrong himself is a co-founder and current investor in Associated Content.)

Such business models are conducive to attracting traffic through search engines in order to generate low-priced ad network advertising, and sometimes have been blamed for cluttering the Web with poor quality content. The question is whether they are conducive to helping AOL satisfy its desire to align its name with premium content.

“When I think of high quality content, I think of professional writers,” said Palau. “I think there will still be quality control issues.” The Wall Street Journal report says SEED stories will be filtered to catch things like obscenities and poor grammar, and then fact-checked and edited by an editor.

Despite potential quality or credibility issues, Palau said AOL’s content model could be beneficial from an audience targeting perspective. “If I’m Rubbermaid, just to be able to tap into that is acceptable to me just because of the targeting piece.”

AOL recently has highlighted its efforts to derive insights from the reams of data it gathers on its sites and in its Advertising.com network. In September, for instance, AOL SVP Global Sales Development Erin Clift told ClickZ News the firm planned to productize its audience data and insights, and work with agencies to better understand what kind of information they want.

Until the fruits of AOL’s new content platform have ripened, it’s unclear whether the firm’s data-driven project will sync with its oft-stated intention to develop high quality content for advertisers. During Advertising Week in New York, an event AOL used to help establish itself as a partner for brand advertisers and their agencies, the company largely ignored its Advertising.com display ad network and other offerings such as its keyword-driven Sponsored Listings network (formerly known as Quigo). Instead, it stressed custom branding opportunities over those commoditized products, and touted its plans to partner with IKEA and its agency Mediaedge:cia to develop branded content for the furniture seller.

If AOL aims to sell content covering timely news-driven topics through its direct sales force, as opposed to through its ad networks, it could be up against some hurdles. “Brand advertisers generally don’t move that fast,” said Palau, who added that optimizing content for search takes time.

In addition, he continued, for AOL to develop content, attract sizable traffic to it, and sell and create advertising, could take longer than the demand for such content exists. “There’s a very short shelf life for that to happen,” said Palau.

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