AOL Seeks Place in Upfront Scene

Mar 12, 2007  •  Post A Comment

Randy Falco may have left NBC, but he’s still interested in the broadcast upfront ad market.

One of the first things Mr. Falco asked his sales staff about after taking over as CEO of AOL was what the Internet company was doing for the upfront, said Kathleen Kayse, executive VP of sales and partnership alliances at AOL.

Mr. Falco said, “I want to do an upfront. I think it’s important,” she recalled.

AOL last week invited senior management of leading advertisers, big spenders on the Internet, media agency leaders and buyers of broadcast and digital ad space to its “First Look” event on April 17 in New York. The presentation is designed to preview the big events AOL is planning during 2007 and 2008.

AOL’s upfront follows a similar event held last month by Yahoo, dubbed the “infront.” The meetings reflect online players’ efforts to shift more television spending to video on the Web, where advertising sales have been growing by double-digit increments. Ad buyers appear to be listening as they try to figure out how to reach audiences on the Internet.

At last month’s Yahoo meeting, which was well attended, company executives pointed out that consumers spend 17 percent of their time online, but just 6 percent of ad spending is online.

Microsoft holds “strategic account summits” for big advertisers and buyers in May at its Washington headquarters.

And AOL last year held a road show, stopping in seven major markets to introduce marketers to its programming.

“For us it was a major ‘A-ha’ moment for the industry to see the depth and breadth of original content that we were creating through media networks,” Ms. Kayse said.

“The pervasiveness of broadband is really pushing agencies and clients to consider all their options in the media space, and we want AOL to be at the forefront of their consideration set when they’re thinking about their video assets.”

AOL will be doing a programming road show again this year, starting today in Chicago. But the New York First Look will be different, focusing on big programming events around which clients can create marketing programs.

As part of the presentation, AOL is expected to announce a second season of “Gold Rush,” the Mark Burnett treasure hunt.

The event will be a coming-out party for Mr. Falco, who was in charge of NBC’s sales force as president and chief operating officer of the NBC Universal Television Group.

“The upfront is really his first foray in standing with us arm-in-arm and showing his confidence in where we’re going as a company and introducing it to an audience he’s familiar with,” Ms. Kayse said.

AOL has been a big financial headache for Time Warner since the biggest media company acquired the Web enterprise. Internet users have shifted to broadband, shrinking AOL’s base of members paying for dial-up Web access. Last year, AOL made a big strategic shift by turning into a free site that relies on advertising support.

The Internet upfront presentations are springing up as their predecessors, the broadcast and cable upfronts, are in transition. Both of those traditional markets are beset by challenge as advertisers are opting to do more of their business when they want to, rather than in the traditional May-June time frame. Some ad buyers’ attitude toward online upfront presentation echoes their approach to the cable market.

AOL’s Reach

Tom Winner, media director at Wieden & Kennedy, said his agency generally asks cable networks to come in to show their wares, rather than go to upfront presentations.

“We kind of have that attitude with regard to the online guys as well,” he said.

AOL salespeople visited the agency last week, he said. The agency was talking about the possibility of doing upfront deals and AOL was open to it.

“There’s no doubt we’re thinking that the major online guys could play a role similar to a broadcast network,” Mr. Winner said. But both sides are still trying to define their relationship.

When a commercial airs on TV, ad buyers know how to gauge its impact. But it’s not clear it would have the same impact online, because the screen isn’t as big and people may not be in the mood to accept a full-screen ad — particularly if they’re at work and are using the Internet to find a particular piece of information.

“I don’t think we’re ready to consider them equal to a network, but we’re certainly thinking that’s a possibility,” Mr. Winner said.

Television networks have been trying to recapture ad dollars moving to the Internet by beefing up their own sites with both episodes of their shows and original content.

Ms. Kayse said TV network sites can’t match AOL’s reach.

“We are not looking to replace what individuals are doing on television or even with their television sites,” she said. “Certainly their Web assets are somewhat compelling, but they don’t have the scale that AOL brings to bear. So we could absolutely entertain working more closely with marketers on how to amplify their message.”