The end of Len Short's tumultuous tenure at America Online last week signaled yet another strategic and tactical shift for the Internet service as it continues to lose dial-up subscribers to broadband rivals.
In his 13 months as evp of brand marketing, Short turned AOL—primarily known for its CD-ROM mass mailings and low-budget, late-night TV ads—into a $300 million advertiser with a high profile on big events like the Super Bowl, the Academy Awards and the Daytona 500. Now, AOL is cutting that ad budget by at least a third and planning a return to the ROI-driven approach of the old days, according to sources, possibly including more disc drops and low-CPM ad buys.
"Management never wanted to focus on the big-event advertising that Len did," said one source. Short referred calls to AOL. An AOL rep declined comment.
Sources said the fiscally conservative, back-to-basics approach was cemented three months ago when the marketing department started reporting to vice chairman Joseph Ripp, who has a financial background, rather than chairman and CEO Jonathan Miller, who recruited Short.
At the same time, sources said, parent Time Warner became more focused on AOL, its only unit to record a year-over-year revenue decline in 2003. One source said Don Logan, chairman and CEO of TW's media and communications group, has been influencing decisions there.
AOL chief marketing officer Joe Redling has been playing a larger role as well: Two weeks ago he rescheduled just three hours before Carat was due to give its final presentation in the company's media review so he could attend, sources said. "That was it [for Short]—it was over," said one source. Redling was unavailable for comment.
AOL said it would retain Interpublic Group's Initiative for media duties last Monday, the same day Short's exit became public.
After his arrival in January 2003, Short swiftly fired the six-year creative incumbent, IPG's Gotham, and split the account between Omnicom's BBDO and independent Wieden + Kennedy (and doled out assignments to Crispin Porter + Bogusky and Hill, Holliday, Connors, Cosmopulos).
Sources said Redling, a five-year AOL veteran, will continue to call the advertising shots but that some of Short's duties will be assumed by svp of brand advertising and promotions Richard Taylor, who joined in April after nine years at Burger King.
Taylor is unlikely to "make any waves," noted one source. "[He's] your basic block-and-tackle guy." Taylor was unavailable for comment.
In contrast, Short "had the courage, tenacity and vision to go against that bureaucracy—he didn't lead by consensus," said one source. But that brash style rankled TW executives and colleagues accustomed to working in a more buttoned-up environment, sources said.
While Short helped raised AOL's profile with spots touting its Top Speed technology, broadband offerings and features such as spam filters, the company continues to lose customers to rivals offering cheaper or faster service. Only a fraction of defectors, forced to go elsewhere for a broadband connection, are paying $14.95 a month for AOL's premium-content package, noted Tom Wolzien, a senior media analyst at Sanford C. Bernstein & Co.
"You can have the greatest advertising in the world, but if the value proposition isn't appropriate to your consumers, nothing's going to work," Wolzien said.