NEW YORK -- With AOL Time Warner's "old media" guard running the company, buyers are looking to the new leadership to improve the cross-platform deal-making process that was a focus of the old regime's "synergy" strategy.
"Time Inc. [sales reps] have superb relationships with [ad agencies]," said David Verklin, CEO of Carat North America. "It should have been driven from the Time Inc. side, not AOL."
Since AOL and Time Warner merged in January 2000, AOLTW executives touted grandiose cross-platform sales plans. But those promises largely failed to materialize, given the complexity of the deals, and a clash of corporate culture and business models?all of which were compounded by the economic downturn.
Earlier this month, COO Robert Pittman resigned. Time Inc. CEO Don Logan was named chairman of the New Media & Communications group and HBO chief executive Jeff Bewkes chairman of the Entertainment & Networks group. But last week brought more bad news: a preliminary probe by the Securities and Exchange Commission of AOL's advertising accounting practices, and new lows in the company's stock price.
"We had a lot of successes ? but it was difficult. We didn't hit the targets we projected," said Logan. "We are going to have a centralized sales effort. We'll refocus it."
"I think AOL could apply the model that HBO and Time Inc. use for building quality products, and they have the advantage of three revenue streams (advertising, subscriptions and e-commerce). Shame on us if we can't make this work," said Ann Moore, Time Inc.'s new chairman.
The body handling cross-platform deals?Global Marketing Solutions?was led by AOL executives who bypassed (and thereby alienated) agencies by going straight to the client, a practice not shared by Time Warner executives.
One outcome buyers predicted will be a bigger push of Time Warner content on AOL. With buyers less interested in posting ads on AOL than in the service's e-commerce and content capabilities, that direction may be key in getting advertisers to sign on to comprehensive cross-media deals.