A Clueless AOL Yet Again... A Ridiculous Content Strategy
By Tom Foremski - December 1, 2009
AOL has an uncanny knack for making all wrong decisions at critical times.
There was a time when America Online, as it was known back in the early 1990s could have become the Internet if it had opened up its platform. It was the largest online network and had incredible momentum under the leadership of Steve Case.
Later, in 2006 when AOL opened up its platform, at a time when creating a safe walled-garden for its users would have been a great service, a great time to build a social network.
And let's not mention the acquisition of Time-Warner. That was a huge disaster and its announcement in 2000 signaled the end of the dotcom boom and the start of the dotbomb.
Now AOL has a new content strategy. Emily Steel at the Wall Street Journal reports:
Instead of waiting to sell ads until an article or Web video is produced, AOL--which has scores of niche sites, such as beauty and fashion site Stylelist, in addition to its AOL brand--says it plans to offer marketers the chance to work with its editorial team to create custom content.
AOL says that its ad model will allow advertisers to be affiliated with the content but not control what is written or created.
This isn't going to work. There is no way advertisers will want to pay for being "affiliated" with content if it is critical or is negative in sentiment, and over which they have no control.
If it works at all, it will result in bland, beige content that will not get a second click from readers once they get a first look.
And this is CEO Tim Armstrong's best plan to revamp the company as a content powerhouse?
Why doesn't he just republish press releases and advertorials? There's tons of those and they are free.
A low-end content strategy
The Wall Street Journal says that sources report that Mr Armstrong owns a 20% stake in Demand Media and Associated Content. These companies are trying to produce niche media on a mass scale by paying attention to what people are search for and what advertisers on Google Adsense will pay for.
He is attempting to bring a similar system to AOL. It will pay freelancers to produce specific articles based on how much advertising it can sell next to the content.
Mr Armstrong joined AOL in March 2009. He was previously head of Google's North American and Latin American advertising group. It's not surprising that he favors an automated news gathering and production system closely coupled with advertising -- that's how Google's AdSense system works.
But Google AdSense is not that great at monetizing content. But that doesn't matter too much because it doesn't have to pay for the content it automatically matches content on third-party sites with contextual ads.
How will AOL's system improve the monetization of content? Freelancers will be expected to produce content for free and then get paid later. Will they receive more money than if they published the content themselves and used AdSense to monetize it? That's clearly the promise.
But why would advertisers pay more to advertise on the AOL platform if they can use an ad network such as AdSense and advertise next to similar content? And they wouldn't need to become involved in the creation of content, as in the AOL approach.
It doesn't make sense.
- - -
Please see:
Business Insider gets a copy of AOL email welcoming new writers:
The email, from an editor at AOL site RentedSpaces.com, encourages writers to produce 300-500 word stories fast in a style that's "colorful, concise, [and] opinionated." But he doesn't want them to go too far.
"We're not Gawker, so be friendly and authoritative."
He tells them stories don't have to be based on original reporting. He writes, "All we want to know for a pitch is: what's the story, who broke it (AP, NYT, BW, Bloomberg,etc.), and how you will advance the story if you are following someone else's reporting," reads the email.
When writers file their copy, they're expected to "Include 140 characters for a Tweet or Facebook update."
AOL wants its editors to write in a way that will help Google will find their stories -- that they're "search engine optimized." For example, the RentedSpaces editor tells his staffers to "make sure the first few words and first graf contain the critical keywords."
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Comments (5)
Coming on the heels of AOL's announcement that they'll be using algorithms over people to pick viable stories (from existing online content no less), why should we surprised at this latest admission they don't get it?
Maybe the headline here should read "desperate times call for outmoded desperate measures." I've just heard about a local NBC owned station that's trying the same approach to advertiser-driven content in their 5pm newscast. Only they aren't creating headlines trumpeting that fact.
Posted: December 1, 2009 1:10 PM
Harriet: Yes, given Armstrong's background it isn't surprising. Will this type of approach to "journalism" produce anything of value? I would think not. If it can be shown that professionally produced content is more valuable to advertisers then that would be marvelous but the reality is that a pageview is a pageview no matter how the content is created. That's devaluing the work of journalists. The dirty little secret is that advertising pays so little, that little effort can be afforded to creating online content. Clearly, there has to be other ways to pay for professional content and that's what Rupert Murdoch is trying to do with subscriptions. I'm glad to see he is trying out different business models, at least he is trying rather than crying :)
Posted: December 1, 2009 3:06 PM
I agree with you on this one Tom - this sounds like a downward spiral for AOL.
In the short-term I'm guessing they'll probably monetize this content against their own Premium/Network/BT advertising inventory since this will deliver far higher margins than Adsense.
Over time though this will diminish the value of their ad inventory to marketers, leading to lower CPMs, lower revenue, and a further diminished AOL (Aol.)
Posted: December 2, 2009 12:05 PM
Marshall: You've hit the nail on the head, it will devalue their own ad inventory. Crazy.
Posted: December 2, 2009 2:13 PM
Searchers will be able to tell the difference between good content and bad. I don't think this is about creating more appealing content and better search results. This is really a business model strategy that reduces most of the internal content and editorial cost structure that AOL would incur and grafts those costs to a fragmented network of very low cost freelance producers.
Thanks for this article. I blogged on it here: http://www.contentfactor.com/blog/2009/12/new-aol-is-trying-to-become-pay-to-play.html
Posted: December 8, 2009 4:40 AM