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AOL Trashes Time Warner's Reputation

America Online needs to learn some manners, decorum or at least ethics beyond those taught at Enron U.

The crux of the issue — which involves billions of dollars, the careers of thousands and the future of media — is that AOL is now AOL Time Warner. Historically, working with Time Warner properties was a collaborative and successful experience for agencies and clients alike. But with the merger, AOL's new age culture is destroying what thousands of great Time Warner salespeople took decades to build — relationships that ensured client, agency and publisher/broadcaster met their goals and looked forward to working together again.

That is not how AOL's sales force works. Their unabashed lack of professionalism is widely, if quietly, acknowledged by media executives, clients, agencies and even some of their own employees.

AOL even seems proud of its arrogance. At a recent AdClub/AAF luncheon, AOL executive Myer Berlow demonstrated how endemic AOL's antipathy to fair, competitive business practices is, particularly with agencies. Just five minutes after apologizing to agencies for AOL's years of abuse, he answered a question about evaluating the value of different elements in the media mix with, “A monkey can put together a media mix.” He continued with a rant on the stupidity of anyone who does not “focus on the relationship.”

AOL's belief that agencies do not add value is critical to its business model and its culture. Pity the poor Time Warner sales manager who brings cherished relationships into its conference rooms.

So what kind of disrespect are we getting from AOL? The following examples involve multimillion-dollar advertisers.

We run what we want, whenever we want to. AOL offers advertisers a package for a price with a list of potential advertising units, such as the banner, the smaller banner and the useless thumbnail, etc. But it refuses to tell the advertiser how many of each format, or the relative weight of each across a multimillion-dollar buy. This is unimaginable in the traditional world. Think of a magazine representative saying, “You'll have some spreads, a few full pages and a couple quarters, but I can't tell you how many of each or where they will run in the book.”

Take this to the next level. AOL decides when an advertiser's inventory will run. You can ask AOL to spread an inventory of 5 million impressions over several weeks, but it may decide to run all those impressions in 24 hours. What if NBC decided to run your entire network buy in 24 hours instead of extended over the television season? That would require quite an interesting make good.

AOL owns the relationship. And that means every relationship. A major advertiser suggests to bring one of its partners into an AOL deal. Before the advertiser has a chance to call its partner, AOL does, leaving the errant impression that AOL thought up the suggested synergy.

Running an end around on the agency is standard operating procedure for AOL. What is really cold is multiple end runs around multiple clients in the same company. AOL has made promises to one person, but then, before that person can respond, given a better or different deal to someone else in the same organization. The sell-in process becomes unnecessarily politicized and no one on the client side feels he owns the relationship. And maybe that was the point, as the last thing AOL wants is to be managed.

Accountability is for everyone else. While it is hard to turn down click-throughs that are presented as 200 percent higher than industry averages, common sense tells you that AOL users do not behave that differently than others elsewhere online — unless all one does on AOL is click on banners.

Instead of third-party audits, AOL issues activity reports. Many of us think the numbers in these reports simply do not add up. Four weeks after a buy has ended and after reviewing reports that do not add up to the agreed-upon impressions, AOL delivers a missing report that accounts for all those missing impressions. It is like finding those missing minutes on the Watergate tapes and hearing it was really just Dick and Pat talking to the girls.

Who's getting mail? AOL reports every single subscriber increase, claiming to have more than 30 million subscribers. But how many are active? Despite that I, and thousands of users, took off the AOL training wheels long ago, AOL never reports a user base loss and it never discusses churn. Privately, you hear there is double-digit percentage loss monthly. This question can be addressed only by a third-party audit.

The big question is how does AOL still make those huge sales? Clients like the seeming simplicity of the one-stop buy — so similar to television and, at least at first, so easy to manage. And everyone knows AOL is not going out of business. But that is just what it might do to the rest of our business that works hard to be fair, accountable and honest.

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