AOL Says Convergence is Key to Advertising Success

America Online Inc. has big plans to change the entire paradigm of
advertising, Paul Corvino, senior vice president and general manager of
Interactive Marketing for AOL, said Monday.

Corvino made the declaration during the opening remarks of ADWEEK Forum at
Internet World Fall 2000 in the Jacob Javits Conference Center in New York
City.

“Convergence is the next stage,” he said. “This is where the whole paradigm
is going to change.”

Convergence, Corvino explained, will enable AOL customers to utilize the AOL
service through many touch points, from the PC to television to the radio to
the telephone and various other appliances.

AOL has been agressively pursuing these touch points through initiatives
like AOLTV, AOL 6.0 — which comes pre-loaded with many AOL “Anywhere”
components — AOL by Phone (also supported by AOL 6.0), and products like
the AOL/Gateway appliance scheduled to debut later this year.

He explained that these things will eventually make traditional advertising
obsolete. He used TiVo as an example, noting that many TiVo users utilize
the device to avoid watching commercials.

So what’s the solution for businesses that need to get their messages out to
the mass market?

“It’s all going to be more targeting,” Corvino said. “It’s going to be more
one-on-one.”

For instance, Corvino said AOLTV is creating more efficient and
consumer-friendly placement advertising. “Say you’re watching Friends and
you say, ‘I really like the shirt Chandler is wearing.’ You can click on the
shirt and it will take you to a site where you can buy it.”

AOL launched its AOLTV initiative this summer and is now gearing up for a
massive push of the product through set-top boxes, TiVo and the PC.

“The importance is how this will turn a passive device (i.e. television)
into an interactive device,” Corvino said.

Corvino noted that advertising is a three-step process: branding,
information and transaction. Traditionally, branding has been accomplished
through media like television, print ads and radio; Information has been
distributed through brochures and sales representatives; and transactions
have been conducted by phone or in-person.

“The Internet is the only medium in which you can do all three in one,”
Corvino said.

But Corvino also noted that according to several studies, by far the most
important factor to online consumers is convenience. That, he said, is where
AOL shines brightest. He said early adopters of Internet technology have
disparagingly referred to AOL as Internet with training wheels.

“I personally needed the training wheels,” he said, adding that early
adopters “really aren’t representative of the real world. You’ve got to
measure it by the mass market.”

That, he said, means that new technology should not be pursued simply
because it is new. “We have to find the benefit as opposed to the future.”

AOL, he said, makes it easy for online consumers to find what they’re
seeking, even with millions of online venues competing for their attention.
He described the rest of the Internet as a gigantic wharehouse where
everything is in a box and hard to find.

“AOL is like going to a supermarket,” he said. “You know the aisles and you
know where the cereal is.”

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