Toss the Sod on America Online
The morning after a celebrity-ornamented launch event for AOL 8.0, The New York Times buried the list of celebrity attendees in a story leading with the news that AOL will reduce pop-ups.
Although it may seem bizarre that AOL could earn a headline for acquiescing to a consumer demand its competitors have already acknowledged, the Times got it right.
After weeks of exhaustive play-by-play accounts of personnel changes and all the pre-publicity for AOL 8.0, the real story is that AOL has assumed the position of an industry follower, both in the minds of the media and of the consumers who may or may not care if they’ve “got mail.”
In sum, AOL is irrelevant to the internet advertising industry.
This news should not be shocking. AOL is demonstrating all the attributes of a business that’s ready for the sidelines, rooting for the first string to win the game.
Let us count the ways in which AOL is no longer relevant.
Let’s start with the AOL 8.0 release. This product was designed to meet the needs of a market that ceased to exist sometime in late 1999. Ted Leonisis and the entire Reston team seem to have been laboring under the assumption that there are no communities on the web and that only community participation drives internet usage.
These assumptions may be justifiable if you’ve spent the last several years locked away in your own walled garden instead of venturing outside into that big, open, worldwide web.
I’m not disputing the marketing appeal of communities; Forrester Research reports that the presence of a community exponentially increases site traffic.
However, Ted and I are not the only people reading Forrester. Plenty of sites have seen the advantage of adding community components to their sites. This functionality, no matter how well executed, is not something one can claim as a product differentiator or pre-emptor.
It is not the innovation of an industry leader. It’s a follower, or rather fallback tactic, designed to hold ground that is so obviously slipping away.
Now let’s look at the AOL brand.
Functionality does not a brand build, and life without a brand is the definition of irrelevance.
Yet the AOL brand is on life support, even with all the dollars pumped into advertising.
What does AOL really mean to consumers, after all?
It’s a gateway to content, a first baby step in exploring the internet. And, yes, it offers a really cool instant messaging capability.
But these claims can or will be made by a competitor. None offer a sustainable and compelling reason to buy, a base upon which to build a brand.
This isn’t something that requires a brain surgeon. Why else would the rumors–or are they leaks?–out of headquarters be so unequivocal? Eliminate AOL from the corporate masthead. Michael Wolff all but reported the inevitability of it in his New York magazine column earlier this month. A possible scenario: support the product but not the brand.
It makes sense, too. This could set the stage for a future re-positioning as a “new” Time Warner brand: TW online– keyword TWO, or a consolidation with an existing brand: CNN community.
Or build up the web-based properties and let the AOL product go the way of black and white TVs, 8-tracks and turntables, as something great while it lasted but irrelevant in today’s media world.
Now let’s look at AOL’s technology.
Theirs is not the stuff that an industry leader should rely on. AOL is written in Rainman, a code that limits AOL’s development capabilities, thus limiting what it can do, even if it had the will to do it.
Yes, there are real reasons why they have so much difficulty adapting new ad formats. Yes, there is a hard-coded reason they can’t report ad data accurately or effectively.
And most critically, there probably is a hard-coded reason they won’t support third- party audits. It is their technology.
But in the online ad industry, circa late 2002, none of this matters much. The inability to adapt, in the “format du-jour,” super-accountable world of online advertising, equals death.
What would the cost be for a new platform? So high that Ted and Steve would risk extinction? Probably not. There is something else that’s holding up the life-saving upgrades.
Which bring us to AOL’s real shortcoming. At the root of it all, they just don’t get it.
Look at the pre-launch press on 8.0. As late as September it was “unclear” which browser they would use. A beguilingly simple question, right? MSN = live, Netscape = die. Not for this crack team.
They seem to be considering the possibility of resurrecting Netscape with its 3.2 percent share of market. While over-achievers usually deserve applause on principle, there were and still are bigger miracles to work.
Likewise the focus on “community.”
Why is this above all other existing and potentially existing functionality the savior for AOL, especially when competitors can and will match them blow for blow?
It’s simple blindness to reality, symptomatic of the malaise that has been destroying AOL for years.
Call it arrogance. Only a culture of arrogance would make it acceptable for AOL to ignore rules or realities that every other internet publisher has known for years.
Not only did they create a walled garden, they don’t want to leave it even now, when it is clearly rotting.
The Time Warner AOL merger was supposed to give Time Warner more than just a leading internet brand. It was supposed to infuse the “traditional” corporation with the knowledge, understanding and most especially the vision that would enable it to lead across all media.
Well, we all know that hasn’t happened, and you don’t need a pop-up ad to tell you it is that fact that renders AOL irrelevant at TW headquarters and to us all.
