AOL targeting big marketers but could steal smaller ones

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aol_small.jpgADOTAS — When AOL CEO Tim Armstrong unveils a strategy Friday that focuses on combining specialized content and display advertising, he plans to make AOL appealing to large consumer products companies with big marketing budgets like Procter & Gamble.

But he also is looking to gather the smaller local markets as well. I asked Guy Schuller, who oversees media strategy for Chrysler and other clients of interactive ad agency Organic Inc, what he sees for smaller marketers. 

Schuller said that online display marketplace has traditionally not been easily accessible to small marketers. Launching a local campaign required specific media expertise, appropriate creative and the implementation of tracking. Local newspaper and television sites had some success with a packaged media + creative approach but ultimately targeting was a challenge and these buys tended to be inefficient, quantifying ROI was difficult. On the flip side, search was naturally set up to be extremely targeted and performance driven which made it an easy sell for local businesses.

“This has improved over the last few years with the resurgence of the Ad Networks and their targeting capabilities. The adoption of these advance targeting features and different buying models (Cost Per Acquisition) have helped to reduce waste and have provided ROI focused small marketers with an efficient way to use display. The only issue is that while these buys are geographically targeted (IP Address) they may not be contextually relevant from a local perspective which can affect the impact.

AOL seems to be trying to address this local display opportunity by investigating an auction based display sales approach, similar to search, and by acquiring content (Patch) and tools (Going) that can reach local audiences and deliver on relevancy. If they can be the leaders of the local space by making it as accessible and contextually relevant as possible, they can tap into a sizable, and potentially lucrative, marketplace.”

I also asked him about concerns that while there are billions of advertising moving from traditional advertising to online that companies will spend the money, or a smaller portion than they used to, on their own sites and marketing rather than on display, banner, etc. of third-parties.

“The continued shift in consumer behavior requires all marketers to communicate, at some level, within the digital environment. In turn marketers, large and small, are recognizing this change and investing in their own offerings and sites to keep up. Ultimately they still need to drive awareness and traffic to prove out that investment which results in more online marketing.

“This shift in turn puts pressure on publishers to figure out a way to service and monetize thousands of small buys in addition to catering to large national advertisers. The search vendors, especially Google, have adapted well and have reaped the benefits of selling to both national and local marketers.”

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