AOL beats TV with word of upcoming shows
NEW YORK (AP) — AOL is seeking to capture advertising dollars normally spent on television by showcasing five new interactive programs a month before the broadcast networks announce their fall lineups.
More than 500 advertising executives and media planners were invited to a “First Look” showcase Tuesday – what Chief Executive Randy Falco described as a “coming out party for AOL” as a major online advertising platform.
“What we’re interested in is making sure when advertisers and agencies are deciding what their budgets are for the coming year, they understand there’s an enormous shift going on,” the former NBC executive told The Associated Press.
The First Look event, at the corporate headquarters of AOL LLC parent Time Warner Inc., comes as AOL seeks to increase its advertising revenue to make up for rapid declines in its legacy Internet access business.
AOL announced ad-supported initiatives scheduled to launch this fall or early next year: a site where users can submit photos, video and stories for use on “The Ellen DeGeneres Show” and three games, including a second season of reality TV master Mark Burnett’s “Gold Rush.” A fifth program, a game based on the upcoming “Shrek the Third” movie, is to launch April 26.
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The major networks typically announce their fall schedules in May as part of events called “upfronts,” so named because networks use them to pre-sell the bulk of their advertising for hit shows. Falco said he wasn’t expecting similar advanced sales resulting from Tuesday’s event, but the timing wasn’t coincidental.
“There’s no hiding that,” Falco told the AP. “We’re trying to get out there in front of the traditional broadcast upfronts so we can remind people who control budgets just how important online is becoming to their marketplace.”
Yahoo Inc. held similar events in February in New York and Los Angeles. Television networks, meanwhile, have been pushing their digital platforms along with their traditional broadcasts.
Wenda Harris Millard, Yahoo’s chief sales officer, said the online showcases help traditional advertisers navigate the digital market, which is “very, very different from television.”
“It’s not only the digital advertising agencies who are now buying digital,” Millard said.
She said many traditional advertisers contacted Yahoo following the presentations to set up sales meetings, though she said she could not specify how many or what resulted.
David Hallerman, a senior analyst at the research group eMarketer, said events such as AOL’s might help persuade advertisers to spend more online, but they alone won’t be deal breakers. “It’s a lot of chipping away still,” he said.
According to research by TNS Media Intelligence, spending on online advertising excluding keyword search ads grew 17 percent to $9.8 billion last year. But that’s only 6.5 percent of all advertising, and television gets nearly seven times more spending than the Internet.
While AOL was showcasing new programs at the event, Falco also saw it as a chance to sell advertisers on the AOL platform as a whole, including a new Web e-mail interface in the works and new video-distribution deals with Fox parent News Corp., General Electric Co.’s NBC Universal and CBS Corp.
“The online ad market is quickly consolidating around four major players, and we’re one of them,” Falco said.
According to comScore Media Metrix, Yahoo Inc. is the top online property, followed by Time Warner, Google Inc. and Microsoft Corp. When isolated from Time Warner numbers, however, AOL trails with 109 million U.S. users landing on its sites at least once in February, compared with more than 114 million each for Google and Microsoft and 129 million for Yahoo.
Time Warner lured Falco from NBC to run AOL in November as part of a strategy shift that saw the company give away AOL.com e-mail accounts, software and other features once reserved for paying customers in a more aggressive chase for advertising dollars.
In ousting Jonathan Miller, Time Warner executives were looking for someone with operational experience to execute the plan, and Falco’s work at NBC gives him experience with delivering free programming sponsored by advertising as well as with video, one of the key areas AOL has targeted for growth.