Retooled AOL: Agencies On-Line?

Lisa Brown worries about user experience, not only for AOL subscribers but also for advertisers and agencies. Her job is to sell AOL very differently than it was sold before.

Her mission: to turn AOL into a functional, desirable and viable marketing medium.

To that end, the former cable TV executive, recently named AOL’s president of interactive marketing, this week hosted what company officials called an upfront. It wasn’t one, really, in the sense that it pre-sold anything. But it did have all the entertainment industry trimmings: an over-the-top venue (New York’s Museum of Natural History), dinner, speeches, cocktails — the works.

“The intent wasn’t to come with a wheelbarrow and collect money at the end,” Lisa told me afterwards. “I think we struck the right chord in the right way with the agency and advertising community. We’ve done the apologies, which is all good and great. [But] what are you going to do to change? Rebuild the business. Satisfy the needs of the community you’re trying to sell to. We’re a subscription business and a portfolio asset manager,” she continued, referring to the Time, Inc. brands. “Outside the curtain, there’s CompuServe, Netscape, ICQ and AIM. It’s a scalable service the ad community can easily access.”

Despite drastic subscriber and revenue losses, and yesterday, excision of the AOL name from Time Warner’s letterhead, AOL remains a profitable business. It’s far and wide the largest ISP, generating some one billion dollars in annual revenues.

Where advertisers are concerned, though, AOL hasn’t been very successful recently. The ISP was infamous among advertisers for over-promising and under-delivering. Brown promises a complete overhaul, from reporting structure to Web design, that will put AOL into the competitive set for consumer media buys. She insists it will be easy to use, too.

“Content for content’s sake is not a sticky app,” she told me. “It must have functionality.”

That philosophy has led to the retooling of a number of AOL’s vertical channels. “We know consumers act differently as result of the Internet,” she said. “They go there first to make decisions and manage their daily lives.”

Automotive is her favorite example: “Sixty percent of consumers go online to research before they make a purchase. They usually have around five cars in mind. Ninety-five percent visit a Web site before visiting a showroom. There’s value in having information in a seamless, integrated space.”

She stresses the importance of search in such undertakings, but insists strong campaigns do not live by search alone. “Search by and of itself does not an advertising program make. We’re working toward developing an integrated approach,” Lisa said.

For one upcoming auto campaign, “we’re developing a blog for consumers who are looking at the new [model]. There’s lead-generating and a sweepstakes. People won’t participate unless they’re really interested in that model.”

Other vertical examples include the entertainment and My Money Hub, AOL’s overhauled personal finance section. A dashboard helps pay bills and mortgages, manage banking, as well as secure a loan or car lease. This latter function “threads” (Lisa’s term) to the auto section.

None of these are revolutionary ideas for online advertising, but they are a strong indication AOL is getting its act together. When Brown joined the company 10 months ago, AOL couldn’t accommodate rich media ads, and was far from offering standardized ad units. It was the proverbial 300 lb. gorilla doing anything it wanted. “Anything” didn’t work.

Next week’s splashy launch of AOL’s new 9.0 software will be followed by softer, but significant product launches. Malcolm Bird, senior VP and GM, AOL Kids & Teens, let me preview KOL. The new service for kids operates independently of Mom and Dad’s AOL account, from interface onward. Forget banners, think sponsorships. Bird is also spearheading Red, a not-yet-announced teen service. Expect to hear a lot more about that before the end of the year. Replete with popular features like IM, it “‘so gets’ teenagers,” says Brown.

Age isn’t the only demo in AOL’s crosshairs. A Spanish-language Hispanic service is ready for lift-off. And (scoop!) an African-American AOL service is on the drawing board. “It will evolve in a short period of time,” is as specific as Lisa got on the subject.

We Can Rebuild It

The ad sales department was once organized vertically. That was thrown out by Brown’s predecessor in favor of a regional org chart. Now what?

“Agencies are putting out RFPs [request for proposals]. You have to have national sales to accommodate that,” she said. “But you have to have real specialization in categories that are more complicated…. So you need a force that’s vertical. We also have a team called ‘category sales’. Typically, the top 80 percent of revenue comes from those accounts. HP, for example, is reinventing itself as a B2C company. We need people who can sit and construct a program with them that’s well conceived.”

Brown’s realigning sales internally, with existing sales staff and no new hires. If corporate culture is on the to-do list, she didn’t say. Yet sources at the company have grumbled that pitches for multi-million dollar ad contracts have been hastily (and hysterically) prepared on just a couple days notice.

The last piece of Brown’s puzzle, after standardizing her operation, is to build reporting, optimization and yield management systems. She promises these will roll out in Q4.

Will it be different from the AOL of old? There’s no doubt. Will it succeed with advertisers? Lisa Brown certainly hopes so.

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