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Thursday, August 03, 2006

AOL Needs Advertising 2.0

If AOL is to make a go of its new ad-supported model, the company has to move to the forefront of advertising technology. Being a me-too portal when competing against Google and Yahoo won't cut it.

Per the Baltimore Sun,AOL is betting that its acquisitions of Advertising.com and video advertising company Lightningcast will provide the necessary resources. Video advertising is in its infancy, so the mold has yet to be cast. I expect targeted marketing to be a big part of this since consumers would be willing to fill out some demographic information such as age, income level, home ownership, etc. to get access to free video content, which in general is more valuable than text pages. AOL has to not only deliver a targeted viewership, but also make sure the ads are compelling and interactive.

Video advertising revenue will grow, just not as quickly as display and search advertising, according to Jupiter Research. In these arenas as well AOL must embrace the latest interactive technologies are else become a Trivial Pursuit question. AOL has a sizeable audience (for now) but eyeballs without ROI that is better than your average bear is not sufficient.

By John Gartner at 01:19 PM | Comments (0)

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