
Tim Armstrong, AOL CEO
How’d you like the pun? Good eh? No? Sorry. Anyway, with AOL announcing more investment in quality content, this time in streaming video, it’s good to stand back and see how they got to this point.
If there is one example of a company still around that has felt both the sweet caress and the swift slap of the fast paced tech world, it’s AOL. The good ol’ days (for them, not consumers) of dial up and Joanna Lumley are long gone and instead they are left playing catch up in a market where in the last decade others innovated faster and better. But AOL’s activities over the past few years make it a important company to watch, not only because they are undoubtedly a key player in the digital media market, but because they are a litmus test for how big businesses invest in content in the coming years, as fragmentation increases and UGC aggregation improves.
When I first starting working with AOL in 2007 they had all the swagger and arrogance of the other early internet giants. While difficult to work with, inflexible and staunch supporters of the “take it or leave it” negotiation tactic, as an exec I think it was the fact that they had ad specs different to everyone else’s that probably frustrated me most!
But under the watchful eye of Tim Armstrong, AOL has become a completely different company, characterised in public best by their focus on quality content across a range of key areas, the purchase of Huffington Post and the responsibility placed on Arianna Huffington. However, from my perspective they have changed too, moving so far from the obstinate and bulky company they were, now unrecognisable from their former self. Other players in this market could certainly learn from this.

AOL's share price has seen better days, but is now climbing
However, the change didn’t come out of nowhere – losing a hundreds of millions of dollars a year and wiping $220 billion from your value in 10 years will encourage that a little. AOL have made some sweeping cutbacks, gotten rid of the dead duck that was Bebo (they lost about $840m on that one) and faced criticism of Huff Po’s reliance on unpaid bloggers as a way to create content for cheap. While not exactly positive, AOL is a company that is now leaner then ever, but fighting for survival in a turbulent market. So, while the $10m invested into this new streaming service is a fraction of the $315m paid for Huff Po, the fact that investment is still coming indicates that Armstrong is in this for the long term.
As a bit of an internet snob (or internet hipster maybe) I don’t peruse a lot of mainstream content channels but that doesn’t mean I don’t recognise other people do. I also believe there is great value in content, something that is talked about less and less in digital media. Reach for cheap is one of the fundamental advantages on advertising online, but too often is quality playing second fiddle to that. In the same way that TV buyers want top brands to be around X Factor or world sporting events, we in digital should want the same thing. The problem is that digital has always been only about the numbers and in an environment where you can track everything, that’s understandable. But it’s the intangible factors that I think can often add the most weight to a branding campaign, the subtle associations between a brand and quality content that can leave the lasting impression. People may not tweet about a brand they’ve seen on their favourite website like they may about the ad breaks in BGT, but that doesn’t mean it hasn’t worked – it simply means you can’t easily track it.
For that reason, I think that AOL’s approach is the right one, from a idealistic point of view at least. Whether it will be the right one from a business perspective is yet to be answered, but for a company that is still losing money every quarter, time is more pressing than ever.
Thu, Apr 5, 2012
0 Comments