Digital media buyers are weary of the constant executive and strategic shifts at AOL. But many are surprisingly optimistic that the long-adrift Web portal may finally be taking the proper steps to right itself.
Last week, AOL ousted Platform-A president Lynda Clarizio after just 11 months on the job (which was only six months longer than her predecessor). She was replaced by Yahoo vet Greg Coleman, whose heritage is in traditional brand selling. Then the company revealed a severe revenue decline during parent company Time Warner’s earnings call, causing outrage among some analysts. Pali Research analyst Richard Greenfield issued a missive in which he called for chairman and CEO Randy Falco’ and president/COO Ron Grant’s jobs.
Unfortunately for AOL, the leadership changes and bad news were all too familiar to some buyers. “It feels a little bit like Groundhog Day,” said Amanda Richman, senior vp, director of digital services at MediaVest. Or maybe Back to The Future. “This seems to signal a shift from technology…back to a focus on content and experiences.” Richman is referring to Platform-A’s formation back in 2007. While just a few years ago AOL was touting itself as the home of original entertainment like the Mark Burnett series Gold Rush, Platform-A was delivering a firm statement to the market that AOL would focus on the ad network, performance-based side of the business.
It’s a move the company never should have made, argued David Cohen, executive vp, U.S. director of digital communications at Universal McCann, since that segment was already saturated with imitators all chasing the same direct-response dollars. “The real growth in this industry is in brand marketing. You can’t have your entire sell [be] around spots and dots,” said Cohen.
AOL officials explained that Clarizio had succeeded at integrating the company’s ad network-related acquisitions (Tacoda, Third Screen Media, etc.) and that it’s now time to focus on sales efforts. At least one digital exec buys that argument. “For AOL, 2008 was a year of focusing on their technology to make sure they delivered,” said Carrie Frolich, managing director, digital media MEC Interaction. “They did a great job. It feels like AOL is being proactive with this move, and this is not a backed-in-a-corner move.”
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