AOL Cuts Agency Relations Job; Some Agencies Balk
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Amid a push to redeem itself in the eyes of advertisers and agencies, America Online is eliminating its director of agency relations position. Some agencies call the move a step backwards. AOL says everyone's job is agency relations now.
AOL is cutting the post, held by John Messina, as part of a re-structuring of its ad sales division -- one it says will have every salesperson focusing on agency relations. It comes at a time during which AOL has been publicly wooing agencies. Head of interactive marketing Lisa Brown talked at a recent conference about AOL's intention to make amends for the company's years of arrogance. AOL also held a splashy "upfront" event at New York's Museum of Natural History in September to introduce marketers to its 9.0 Optimized version. Along with those public efforts, AOL says it has introduced changes behind the scenes to make things easier for agencies, such as shortening a 12-page insertion order document to one page.
"AOL is more committed than ever to nurturing and growing meaningful relationships with ad agencies across the country," said Michael Barrett, executive VP of interactive marketing and head of national sales at AOL. "We have figured out a way to be sensitive to agencies' needs throughout the whole sales force. We felt as though having one person in that position was kind of just a vestige of several years ago when we weren't even paying attention to agencies."
But handing over the agency relations function to people working on commission -- rather than by one person charged with advocating for agencies inside AOL -- isn't a good idea, some agency media folks believe. It's such a concern that one media executive, Jason Burnham, president of smallish shop Mass Transit Interactive, is asking like-minded agencies to sign a petition he plans to take to senior AOL executives.
"We really need to have an advocate for the agencies working internally at the company," said Burnham in an e-mail requesting support for the petition, "The biggest fear I have, is that by eliminating John's position...AOL will slip in their efforts in working closely with agencies. While I realize that these efforts are beyond the power of one man, I do feel that...eliminating this position is a step backwards and will not make agencies' lives easier in working with AOL."
Burnham's getting pledges of support from employees at agencies large and small, along with folks at some publishers. It's not clear how much of that support, however, is aimed at showing loyalty to Messina personally. He had been in the job for quite a while, and made some loyal friends at interactive agencies. Messina even sat on the Interactive Advertising Bureau's Agency Relations Council. (Messina remains with AOL but in a different capacity.) He couldn't be reached for comment.
Engineering a Turnaround
"If their plan is to take and distribute the responsibilities of an office like this to individual salespeople, it's going to get highly diluted and it's gong to get handled at a variety of different standard levels," said David Smith, president of Mediasmith and a signer of the petition. "Not every salesperson will approach this from the big picture standpoint. Some of them are just not capable of dong so.... We would very much like to do more work with them for a number of clients and it continues to be difficult."
What AOL is trying to do is engineer a turnaround, as Yahoo!'s ad sales team has seen under Wenda Harris Millard and MSN has seen under Joanne Bradford. All of these major portals, to one extent or another, engendered ill will during the dot-com boom days, going directly to clients and alienating agencies. Yahoo! and MSN seem to have been successful in winning agencies over again, but AOL got a late start and still has a challenge ahead.
"They spent the hey-days fleecing clients in direct relationships that cut out the agencies," says Mark Redetzke, vice president of online media at Zentropy Partners. "Then the client left the mess they had created for the agency to clean up -- meanwhile AOL personnel maintained a position of arrogance because they knew the agency had no leverage."
AOL's delay in recovering has had industry-wide effects. When many publishers began reporting dramatic improvements in revenues after the post-dot-com trough, figures for the industry at large lagged, largely due to AOL's negative influence. Some even took to subtracting AOL's revenues from industry figures, to show a more positive picture of the recovery.
More recently, AOL has made serious headway at winning over some agencies. AOL's Barrett says the company is winning more agency clients, bringing in more revenue, and running more campaigns with agencies.
"There isn't a metric that can be shown that isn't showing that we are doing a better job," said Barrett. "Every one of those metrics has increased dramatically over the past year."
Indeed, some agency players are seeing improvement in the way AOL is working in the community, despite the scrapping of the agency relations position.
"I don't feel that the position was really used correctly to begin with, but they did need it," said James Hering, SVP and director of interactive marketing at Temerlin McClain. "I have seen a much better job [recently] of our local representation working with us as partners."
That agencies care so much about effectively working with AOL shows how powerful a role the company has to play in the interactive media arena. The real difference of opinion arising in the petition, then, is whether one agency point-person is necessary.
"For us, MSN and Yahoo! have greater visibility and it just seems illogical if you are in third place trying to play catch-up to be eliminating positions that are seemingly structured to help fix the problem," said Mediasmith's Smith.
Says AOL's Barrett: "It's not at all a shift -- if anything we're just putting a greater focus on it because it's becoming a bigger and bigger part of our business."