AOL’s new chief marketer on broadband, big events and buying time
In a world filled with major marketing challenges, the task of repositioning America Online is at the top of the list. The AOL Time Warner online unit is on the verge of launching a new product, AOL Broadband, which is the centerpiece of the strategy to turn around both AOL’s slowing subscription growth and, by extension, the health of the AOL-Time Warner merger. The job of selling the American public on AOL has fallen to former Charles Schwab & Co. marketing chief Len Short, who took on the role in January of evp of brand marketing at AOL, following a year-and-a-half break from corporate life. Short moves fast. He fired incumbent agency Gotham in New York during his first week on the job and promptly launched a review for the $150 million campaign to rebrand AOL. He doled out assignments to review finalists BBDO in New York and Crispin Porter + Bogusky in Miami. He has also been buying ad time, having BBDO produce spots for the Super Bowl, the Daytona 500 and the Academy Awards, part of AOL’s strategy to ally itself—and especially AOL Broadband—with major pop-culture events. In an exclusive interview, Short talks to Adweek contributing editor Catharine P. Taylor about the media environment and the challenges and opportunities it presents for AOL.
Q: This story will be running as media executives head to New Orleans for the annual 4A’s Media Conference. How would you define media?
A: It’s where people are looking. At least that’s what we’re looking for. Our approach is to try to elevate our presence in bigger events, like the Super Bowl. If you look at what we did at Schwab, we went from being broadly distributed but not a big part of anything to creating some signature positions and key events throughout the years.
You took an 18-month sabbatical before taking the job at AOL in January. How has the U.S. media industry changed in that time?
I left at the end of the frenzy where the sky was the limit. What I missed is the whole grinding halt that all those possibilities came to. We’re stepping right now into a media environment where our strategy is to be big at big events. For instance, we just did a thing with Nascar at the Daytona 500—which is Nascar’s Super Bowl. Nascar has a huge audience and huge sponsors. We own a car. Our guy [Jeff Green] happened to come from nowhere and win the pole position. So we walked in [to Daytona 500 broadcaster Fox] at the last minute and said, “We want to make something of this.” We created a special commercial that played off our driver and AOL Broadband both being fast. And we paid 28 percent less than in the upfront. Now, that’s unheard of. What it says to me is that some of the big signature stuff is going unbought because people are looking at their [media] dollar and spreading it over a broad buy. One of the things we’re wrestling with at AOL is that we’ve been advertising, but it doesn’t break through, and we’re back in an environment where we need to break through. We need to be ever present, but we have to make our presence known when people are watching, when the events are important. So we are doing the same thing at the Academy Awards.
Can you describe what AOL’s media plan used to be?
The audience was very broad, and it was basically an efficiency buy, so [the ads were] all over [but] never the prime programming. It was never Friends. It was all the rest of the stuff. And there was a fair amount filling in with late-night and then a whole bunch of barter. You’ll run into the advertising, but it never creates momentum and impact. I understand it from watching the same thing at Schwab, because that plan was all about efficiency. When we started taking some liberties and doing some things in bigger events, all of a sudden that became a far more efficient way for us to go to the market. Our awareness and our momentum shot up.
How do you do the same thing at AOL, where you’ve got to make sure the brand is out there, but on the other hand there are a lot of cost pressures?
In our case, we were very focused on ubiquitous presence, so there was a lot of money spent on “Keyword AOL” advertising. You’ll see the ads everywhere. But the point is, what does that accomplish? It doesn’t demonstrate our product. Therefore, we are looking to rework our partnerships in a way where we have a much better demonstration of what AOL, and particularly AOL Broadband, means to a consumer.
I don’t think most people comprehend what AOL Broadband is.
No, you have to show them. One of our big challenges is that we have to let people see that from outside the service. They have to see it to know what we are talking about, but how are you going to become an AOL Broadband member without seeing it? We’re concentrating on, first of all, elevating AOL to a grand stature above all the noise, because there is going to be a lot of noise about fast connections by a million different spenders, like the phone companies. So it’s going to be a message from all over of ubiquitous change, of “you ought to be considering making this shift, essentially from black and white to color.” We want to elevate our brand presence so that we become that Category One provider, that elevated brand, much like Budweiser is in the beer category or Coca Cola is in the soft-drink category. The second thing is that broadband is not generic. Everybody else is just offering a connection, and we’re taking it to the next level.
Do you have any thoughts on broadband as a consumer phenomenon? It seems to me that while nobody was looking, broadband has reached critical mass.
I’ve been saying this for a long time—that everybody overplayed the Internet, and then, of course, it’s just like a stock. It gets beaten back beyond all reason. And then, people start saying, “Oh my god, there’s something here.” We’re in that cycle with broadband, because I can tell you, first of all, the adoption is amazingly fast. People’s household behavior doesn’t change fundamentally when the Internet enters the household, but it changes fundamentally when broadband enters the household. Television becomes very much secondary, and there’s not even much good content yet on broadband.
Whom do you consider to be AOL’s broadband competition?
Well, essentially it’s everybody—phone companies, cable companies and so forth. But in some ways, we don’t have competition, because our product is fundamentally compatible with all the connection providers, and we have proprietary content. However, at this early stage of broadband, some people are making a decision between us and another broadband provider, because they see us as a dial-up connection. That’s going to get eliminated as we go forward. In the past, you’d go to MTV to watch the videos they wanted to show you, and in the future you will go to us to watch any video you want—plus the ones that are breaking before they hit MTV.
It’s the convenience factor.
That’s what TiVo is. When I started in business, there was a thing called Federal Express, and literally in a month we went from doing business by mail to a way where everything worth writing was sent overnight. Fax machines have been around since World War II, but it took Federal Express to speed business up so that all of a sudden, a year later, fax machines went up like a shot. It just needed that fundamental step. Not to minimize what TiVo is, but in some ways, Tivo is to broadband as Federal Express was to the fax machine. The essential idea is of being able to control your entertainment and have it available to you.
As an advertiser, how do you deal with consumers who can increasingly do whatever they want?
It’s easier in a service category. For instance, it works in financial services, because everybody cares about stocks, and it’s very easy to put together a very coherent approach to the marketplace. Meet them where they want to be met; offer them opportunities to interact. It’s harder if you’re a brand manager at Procter & Gamble trying to sell soap. For AOL, there becomes a very rational assemblage of ways to have a presence and ways to create that interaction. If you create a certain perspective, the media opportunities fall into place, and they start to organize behind the principal, and that may be easier for us, because we have an understanding of where we need to fit into the popular culture.
Obviously, there’s big emphasis right now on the union between entertainment and advertising. What is your perspective on that?
It’s a lot like sponsorship. There are a few great things to get done, and then there are a million people who follow and do wasteful, not-so-good things. I never liked sponsorships, because it seemed like a big waste of money that happened to be driven by some lesser ideas that weren’t marketing considerations. I’ve since seen them make a huge impact for categories where you wouldn’t have thought there would be sponsorship opportunities. So it has to do with how they are activated.
Is it worth it for AOL to blanket the world with CD-ROMs?
Do I think they are irrelevant? No. Do I think they are under-utilized? Yeah. They could carry a whole lot about a particular sport; they could carry a lot of interesting stuff. Everybody has a ROM drive, so it could become like a free DVD, and the content could become very valuable to people.
How should media and creative work together, so that an ad idea is a fully thought-out integrated concept?
It’s difficult to make that happen. You go through the review process, and the first thing a consultant says is, “Let’s not ask for media, because the agencies will all come in, and they will make their creative presentation, and then you will get this disconnected media segment of the presentation.” It’s actually very comical that here in a new-business situation, they can’t even make those two things hang together, that the consultants say [to] keep them apart. That’s the agency’s fault, because frankly, the presence is absolutely as important as the message, and the message has to activate the presence.
Yet much of the time, creative and media assignments are divided, even though it seems it’s the wrong time to be doing that.
Right, so what is happening is there’s less optimism from the creative guys, and then the media guys are grinding the numbers, and the message is flatter and flatter in the marketplace.
How has the challenge of marketing an Internet product changed from where it was five years ago?
It’s not different, because when we were obviously the leader in online [trading] at Schwab, we were marketing the proposition of your control over your financial future. So online became an expression of that, but it netted up to a much bigger idea. Online wasn’t the point. If you think of all the dead Internet brands, the point of the brand was that it was something that you knew about, like pet supplies, that was now online. Online is just a natural extension of what we were selling: access and control.
If you had one message for all of the media executives who will be at the conference, what would it be?
Broadband is really going to rock their world.
What would you say to people who say, “He is just saying that because he’s at AOL now?”
I expect them to say that. And I would say, “Don’t say I didn’t warn you.”
Media Q&A: A Conversation with Len Short
AOL’s new chief marketer on broadband, big events and buying time