AOL Beats TV With Word of Upcoming Shows
Tuesday, April 17, 2007; 6:35 PM
NEW YORK -- AOL stepped up its bid to capture advertising dollars normally spent on television by showcasing five new interactive programs a month before the broadcast networks announce their fall lineups.
The online company hosted more than 500 advertising executives and media planners at a "First Look" showcase Tuesday _ what Chief Executive Randy Falco described as a "coming out party for AOL" as a major online advertising platform.
"Everything is growing online," Falco told the audience. "If you want to be where the consumers are going, you have to be with us."
The First Look event, at the corporate headquarters of AOL LLC parent Time Warner Inc., comes as AOL seeks to increase its advertising revenue to make up for rapid declines in its legacy Internet access business.
AOL announced ad-supported initiatives scheduled to launch this fall or early next year: a site where users can submit photos, video and stories for use on "The Ellen DeGeneres Show" and three games, including a second season of reality TV master Mark Burnett's "Gold Rush." A fifth program, a game based on the upcoming "Shrek the Third" movie, is to launch April 26.
Burnett and talk show host Leeza Gibbons were among the celebrities appearing onstage, while DeGeneres and film producer Jeffrey Katzenberg addressed guests via recorded video. The hour-long event was highly scripted, with contestants in a "live" demo of "Gold Rush" given the answers to read on a teleprompter and eight models dressed in gold appearing on cue. Play money dropped from the ceiling during the unveiling of another game, "Million Dollar Bill."
The major networks typically announce their fall schedules in May as part of events called "upfronts," so named because networks use them to pre-sell the bulk of their advertising for hit shows. Falco said he wasn't expecting similar advanced sales resulting from Tuesday's event, but the timing wasn't coincidental.
"There's no hiding that," Falco told The Associated Press. "We're trying to get out there in front of the traditional broadcast upfronts so we can remind people who control budgets just how important online is becoming to their marketplace."
Yahoo Inc. held similar events in February in New York and Los Angeles. Television networks, meanwhile, have been pushing their digital platforms along with their traditional broadcasts.
Wenda Harris Millard, Yahoo's chief sales officer, said the online showcases help traditional advertisers navigate the digital market, which is "very, very different from television."
"It's not only the digital advertising agencies who are now buying digital," Millard said.
She said many traditional advertisers contacted Yahoo following the presentations to set up sales meetings, though she said she could not specify how many or what resulted.
David Hallerman, a senior analyst at the research group eMarketer, said events such as AOL's might help persuade advertisers to spend more online, but they alone won't be deal breakers. "It's a lot of chipping away still," he said.
According to research by TNS Media Intelligence, spending on online advertising excluding keyword search ads grew 17 percent to $9.8 billion last year. But that's only 6.5 percent of all advertising, and television gets nearly seven times more spending than the Internet.
Although AOL used the event to introduce new programs, the company also saw it as a chance to sell advertisers on the AOL platform as a whole, including a new Web e-mail interface in the works. Executives stressed AOL's reach as one of the top four online properties, the others being Yahoo Inc., Google Inc. and Microsoft Corp., according to comScore Media Metrix.
"There are plenty of Web sites, ... but there are only a handful of monetization platforms," said Jeff Bewkes, chief operating officer for Time Warner.
AOL tried to sell advertising executives on coordinating campaigns with television, pointing out the ability to run a spot on a TV show like "Grey's Anatomy" along with a companion online ad when someone types in those words as search terms or reads an article about the show.
Dan DeGuzman, senior director for strategic advertising at Sony BMG Music Entertainment, said he wasn't ready to commit more online dollars, but seeing the new shows unveiled would get him thinking about product placement and other advertising opportunities.
"It adds a little bit more rationale (to online ad spending) depending on what the goals of the campaigns are," he said. "It gives us more options, adds to the marketing arsenal."