AOL’s Tim Armstrong Talks Ads, Patch, and HuffPost Live

As Web evolves, CEO says audiences will gather around trusted brands

Hot off some news about its advertising platform, Project Devil, AOL's CEO Tim Armstrong kicked off Advertising Week at OMMA Global's conference. Trying to cover a lot of ground in only a few minutes, Armstrong addressed the company's sometimes controversial views on content creation, Patch's profitability, and his "equation" for HuffPost Live. Here are some of the highlights:

Armstrong believes a flood of content won't hurt trusted publishers. He bookended his panel discussion dismissing claims that the flood of content on the Internet is a threat to major online publishers—he said the average user is unlikely to explore the wide variety of content at hand and will pick quality over variety. "The world may be exploding but human nature wants you to collect around trusted brands," he told the crowd, noting that most users will stick with 15 Web destinations they trust. 

Armstrong is a believer in Patch's profitability. Armstrong spent a considerable portion of his short talk defending AOL's local journalism project, Patch. He made a point of noting that he has promised investors profitability by 2014 and that the significant investment made by AOL will be valuable in the long run. Armstrong dismissed media criticism of the local network, which has covered Patch's failure to turn a profit thus far (Patch is reported to have lost $147 million in 2011) and made pains to paint it as not only a sound investment, but an agent for positive community change. "Reality is that Patch has probably done more for local communities than any other online entity," he told the crowd, noting the platform's ability to connect a community. 

He broke down the linchpin to HuffPost Live's success mathematically. Armstrong appeared very pleased with the progress of HuffPost Live (though no numbers were discussed), noting that the young streaming news network has a governing equation leading to its success. "We can do 500 percent of the content of cable at 5 percent of cost," he said. He attributed future growth to the platform's ability to dive deeper and into more topics than cable news. Armstrong also hinted at a possible change in the ad model, noting that the network wants to experiment with the possibility of live advertising.

Armstrong, on the future: He countered the notion that online content isn't profitable by saying his experience shows legacy media finding success and many digital sides of traditional and print publications turning profits. Armstrong was also very bullish on the future saying, "'TV ad dollars are coming to the Web" and said that while 2013 will be a transition year, 2014 is where we will see a noticable shift in Web spend.