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AOL’s Reorg: A Mixed Message for Media Buyers?

Industry wonders about AOL’s new ad sales chief
AOL CEO Tim Armstrong

Tim Armstrong | Photo by Mario Tama/Getty Images

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To hear it from AOL, content and brands are the keys to the company’s comeback strategy. But some in the industry wonder if the company’s new pick to lead ad sales muddies the message.

In a memo to staff Monday, AOL CEO Tim Armstrong announced that ad sales chief Jeff Levick would be transitioning out of the company in six weeks. Armstrong also said that Ned Brody, formerly president of AOL’s Advertising.com group, would be promoted to the new position of chief revenue officer and president of Advertising.com, responsible for all global O&O advertising, sales, and ad and publishing products.

As the company focuses on growth, Armstrong said the shift is intended to unify a premium strategy for advertisers and publishers and connect the company’s premium brand formats to its owned and operated properties and the network.

But some media buyers question what Brody’s pedigree in the data-heavy, targeting world of Advertising.com portends for AOL’s efforts at building out the crucial brand relationships.

“It’s curious,” said a digital media buying executive.

Pointing to onetime AOL CEO Randy Falco’s decision to move former Advertising.com head Lynda Clarizio to the company’s top ad position, she said pulling leadership from Advertising.com to lead AOL ad sales has not been successful for the company in the past.

While she viewed Levick as a believer in brand building, she said other former Advertising.com talent has not been effective in winning over buyers more interested in content and brand stories, not targeting and cheaper rates.

Acknowledging that she doesn’t know Brody personally, she said he could bridge the two sides, but added “it will be curious to see how it plays out.”

Michael Greene, an analyst with Forrester Research, said the pick is one more “mixed message” from a company in transition.

“For all the emphasis on building a brand-friendly AOL advertising business, promoting an executive with an Advertising.com lineage doesn’t necessarily mesh well with that desired image,” he said.

AOL is still working against its commodity-buy image from the “dreaded” Platform-A days, Greene said. As the company pushes through its turnaround, it will have to work hard to convince media buyers of their commitment to premium brands.

But AOL’s Armstrong told Adweek that the company’s dedication to premium brands is evident in its actions.

“First and foremost, we are probably the largest investor in premium content and formats,” he said.

He also emphasized that as CEO he has 20 years of experience in the premium space, from ESPN and ABC to newspapers, Google, and other digital content. Beyond the C-suite, the company has five of the strongest leaders in the field (who were also promoted this week), he said.

“We are laser focused on the $40 billion in brand ad dollars that we intend to move to the digital space,” he said.

But Forrester’s Greene said it’s all about execution and questions persist about how AOL is going to interact with the buyers.

Having leadership that understands the quantitative, analytical side of online advertising is clearly important to the company. But as the company tries to strike the right balance between relationships with the media buyers and introducing technologies, Greene said it has to think about the message it sends to the overall buying community.

“With whom are they supposed to interact? Where’s that person they’re supposed to reach out to at AOL when they want to build that high-level relationship? I think they’re still waiting,” he said.

The questions loom particularly large when comparing AOL to Yahoo, another turnaround tech company pushing a strategy based on content and premium brands.

“Yahoo’s Ross Levinsohn has very good relationships with the media buying community, historically,” Greene said. “He has a lot of content-oriented experience and the focus on telling the story that jives a bit better with the message Yahoo is trying to say, which is very similar to the message AOL is trying to put out there in the marketplace.”

But others are more bullish on AOL’s new executive lineup.

While many in the industry say Levick is very smart, they add he’s not the steak dinner salesman often needed to close deals. He might have been the right man to build the ad strategy, but not necessarily the one to carry it out.

“This was a defining moment for Tim,” said Robert Peck, a managing partner at Quasar Capital Advisors and an AOL investor.

After working with Levick at Google and then pulling him to AOL, letting him go must have been a tough “big boy” decision for Armstrong to make, he said. But it could also signal that he’s cutting ties with familiar Google ways of getting things done, and making sure the right people are in place to take AOL to the next level. Brody’s own experience as a founder of an ad company and the solid reputations of the people below him also bode well for the company, he said.

Chris Wexler, vp, group planning director for Compass Point Media, said Brody’s Advertising.com background is “encouraging.”

“If they can really harness their data well, I think that’s where the market wants them to be,” he said. “They’re sitting on a mountain of data and if he can properly monetize that for them, that puts them back in the game a little better.”