AOL’s Road to Redemption

NEW YORK – AOL interactive marketing executive Lisa Brown has a single word for all those disappointed in the Internet service’s past advertising performance: Sorry.

“We created our own issues at AOL, and we have no one to blame but ourselves,” Brown said Wednesday at the Interactive Advertising Bureau (IAB) Advertising Forum. “In many ways, we were on the road to perdition with agencies and advertisers. Now we’re on the road to redemption.”

Brown joined AOL 10 months ago as executive vice president for interactive marketing. She was brought in by AOL chief Jonathan Miller, who worked with her at USA Interactive, to execute a turnaround strategy at the Internet service, which saw its advertising business collapse in the wake of the dot-com meltdown.

Brown said she was confronted with a stark situation when she took over: agencies alienated from AOL, no rich media system to speak of, and an ad business still propped up by big deals signed during the Internet boom.

“You really had a deal-driven business, not a media business,” she said.

Since then, Brown has concentrated on righting the ship. To begin with, AOL has ended the clutter of its pages with many disparate ad sizes. By the end of the year, the Internet service will support the IAB’s four standard ad units, showing just one ad on most pages. In addition, AOL finally accepts rich media ads in the popular formats, like Eyeblaster and Eyewonder, which it previously could not on account of its creaky Rainman publishing system.

“The whole idea of reaching a very targeted audience is what we’re all about,” she said.

Thus far, her efforts seem to be paying off. While AOL’s ad business continues to work through the end of its legacy deals, it has seen some positive signs. In the second quarter, the Internet service’s ad business began to stabilize, and the company expects to sell more advertising this year than last. For the year, its ad revenue is expected to be down at least 35 percent, thanks to the expiration of backlogged ad contracts.

Many of Brown’s moves echo those made by Yahoo! CEO Terry Semel in turning around that portal’s ad business. When Semel took over at Yahoo! in April 2001, he faced many of the same woes: a bad relationship with advertisers, too many unsupportable deals from the dot-com era, and an inefficient sales force.

Brown said the key to repairing relationships with agencies and advertisers is simply giving them what they need.

“At the end of the day, this game is won in inches,” she said, confessing a fondness for the movie “Any Given Sunday.” “The day of the big deals will happen for us, but the proof is in the pudding and you have to execute in the small deals.”

Brown said AOL, as well as the industry, was on track, ready to build its share of marketing dollars based on the audience it can deliver, compelling rich media formats, and the growth in always-on broadband connectivity.

“I believe in the doing, not the saying,” she said.

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