AOL Unveils New Ad Unit

NEW YORK -- In an effort to streamline its advertising sales and plumb new sources of revenue, AOL Time Warner Inc. created a new unit to sell ads and promotions that would spread across the company's vast empire of brands.AOL said the unit, Global Marketing Solutions group, will sell conventional online, magazine and television ads for its media properties that include everything from CNN to Mad magazine. But the company also wants to work with advertisers to create new forms of promotions involving multiple AOL brands. The company hopes to broaden relationships that an advertiser might have with one unit to purchase advertising for multiple divisions of AOL. About 20 companies have already expanded their relationship with AOL since America Online and Time Warner merged last year. They include Swatch, which originally bought ads in Time Inc.'s magazine and is now buying spots on the company's television properties as well as the America Online service. The company appointed Myer Berlow, America Online's former president of Worldwide Interactive Marketing, as president of the Global Marketing Solutions group. Robert Friedman, formerly president of AOLTV, will succeed Berlow as the head of Worldwide Interactive Marketing. Much of the buzz surrounding the merger focused on America Online's newfound access to Time Warner's cable-television lines. But Time Warner's vast media properties -- particularly the advertising and e-commerce potential they hold -- was always the biggest appeal for AOL.Much of the online company's success throughout the 1990s was its ability to market to the customers of partners -- a practice that began in earnest with Time magazine. "For me, this is a dream come true," said Berlow. "The promise of the merger always was to get the brands working together to sell more." Now, the company has 135 million paying subscribers, adding 17.5 million over the past year. But as AOL faces a tapering growth rate of subscribers, the online advertising and e-commerce business is increasingly regarded as a benchmark of success. Tom Wolzien, a senior media analyst at Sanford C. Bernstein & Co., expects that the America Online service will contribute as much as 50% of the earnings growth over the next five to seven years, with the bulk of that coming from advertising revenue. While subscription revenue historically represented the biggest share of revenue for America Online, Wolzien expects a shift as the company derives as much as 70% of revenue from advertising, much like the cable-television business. Copyright (c) 2001 Dow Jones & Company, Inc.

Brand Marketing

AOL Unveils New Ad Unit

Adweek Staff

About

Subscriptions

Events

Publications

WORK SMARTER - LEARN, GROW AND BE INSPIRED.

Subscribe today!

Adweek Staff