America Online, the ailing internet unit of media titan AOL Time Warner, which recently warned that revenues from advertisers and ecommerce would fall 40% this year, admitted Monday it has even worse news for investors.
Revenue losses haven’t yet bottomed-out – and AOL plans to phase out lucrative pop-up ads that it admits infuriate its subscribers. Today (Tuesday) AOL launches its latest software, AOL 8.0, on which it is pinning its hopes for recovery. This will largely phase-out the ubiquitous pop-up.
Says AOL vice-chairman Ted Leonsis: “If it's bothering the customers you shouldn't do it” [a maxim that should be inscribed in pokerwork and adorn the wall of every chairman’s office at every corporation on the face of the planet].
Jonathan Miller, AOL’s new ceo, has made it clear that the road to fiscal redemption lies in de-emphasising advertising while developing high speed services and premium offerings for which subscribers will be willing to pay more. Every element of the AOL business is being reassessed in the light of this credo, from its marketing messages to whether it should offer a premium brand in addition to present services.
Probably due for the chop is the unit’s hoary headline: ‘So easy, no wonder it's Number One’. Admits Leonsis: “We lost our way in the midst of this big merger. We have to re-set what the expectations of the company are.”
And pop-ups or not – to repeat the company’s marketing mantra – with an industry-leading subscriber base of 26 million, AOL will remain attractive to advertisers.
Data sourced from: Financial Times; additional content by WARC staff