AOL's Armstrong: Brands, Content Strong on Eve of Spinoff

AOL chairman and CEO Tim Armstrong touted his company's consumer brand and content strength one more time here Wednesday ahead of AOL's spinoff from Time Warner.Speaking at the 37th annual UBS Global Media and Communications Conference, Armstrong finished AOL's road show ahead of its spinoff set to be completed later on Wednesday. AOL shares will once again be separately trading on the New York Stock Exchange as of Thursday.During his lunch time keynote appearance on the final day of the UBS gathering, Armstrong reiterated the key role content plays in his strategy for AOL, said he will sell off parts of the business that don't make sense and make technology tuck-in acquisitions.Asked about the AOL brand, Armstrong said the company's consumer brand is strong and popular, even though the business brand has hurt due to what he said was "possibly the worst merger in history."Armstrong also told the crowded conference room at the Grand Hyatt hotel in midtown Manhattan that AOL will roll out a new advertising platform next year that will be more seamless and easy to use for marketers. For example, AOL wasn't "maniacal" enough about forming a unified system for ads as it has used a patchwork of ad tech and other companies that it had acquired over the years. Growth in unique users and display ads are among his key near-term goals, he told the Wall Street crowd. What makes AOL's content approach different from competitors? Armstrong cited the company's 100 million unique users, and many more globally, as well as its ability to use in-depth data to analyze content needs and demand.Mass-scale and local content are both part of AOL's strategy, according to Armstrong. Using social networking and other Web sites has allowed AOL to broaden the sources of its traffic, with its online access business only providing less than 20 percent of its traffic, he said in countering recent analyst concerns that the company is too depend on its access operation. Asked after his conference appearance about the importance of entertainment content for AOL, Armstrong told The Hollywood Reporter: "It is key. That's why we have him on our board (of directors)," he added, pointing at former William Morris chairman and CEO James Wiatt who had come to the UBS gathering with Armstrong.TMZ may end up with Time Warner as part of AOL's spin-off agreement, but Armstrong told THR he plans to build out the company's own entertainment brands. For example, he said that AOL entertainment and celebrity news site PopEater actually gets better traffic than TMZ. During his on-stage appearance, Armstrong also highlighted the growing importance of online video for AOL, explaining that the company is now producing six times the amount of video that it put out earlier in the year.Armstrong wasn't the only one discussing online video at the UBS gathering on Wednesday. CBS Corp. chief research officer David Poltrack in his annual presentation on the outlook for the broadcast networks discussed the online video opportunity, saying Nielsen data shows that long-form viewing on the Web is up over the past year.He also said his team's research is now concentrated on ad effectiveness of various distribution forms. He argued that the ad value of online viewing may over time match or exceed that of live viewing and DVR playback if the number of online ad units is expanded and online attracts premium rates due to higher efficiency.The UBS conference on Wednesday also featured a panel on video distribution in the digital world with departing CBS Interactive boss Quincy Smith, NBC Universal president of digital distribution JB Perrette and Michael Lang, executive vp, business development and strategy at Fox.Perrette predicted that the subscription and free, ad-supported business models will be able to co-exist in the digital age in the future.He also said media companies must continue to innovate their online ad offers, citing his own company's progress and such things as Web ads that let consumers choose which car ad they want to watch.Smith said the business model that allows media firms to make appropriate amounts of money is "not there yet," and he argued industry folks' focus must be to make sure that "the future of TV is about video."One of his key worries is about distribution windows, he said, citing questions about whether streaming a TV show before bringing it to syndication makes it less valuable.All three executives highlighted the need for media companies to be able to measure total audiences across the TV, DVR, their own Web sites and aggregators like Hulu to get fully paid by advertisers for their content.Lang said that the Web business is still in the first inning, predicting it may be as established in 10-15 years as the cable business is now after several decades of development.Lang also suggested that cloud computing has a big future and is a play that could revolutionize electronic sell-through.Nielsen Business Media

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AOL's Armstrong: Brands, Content Strong on Eve of Spinoff

Georg Szalai, The Hollywood Reporter

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Georg Szalai, The Hollywood Reporter