It was a big week of announcements surrounding AOL Inc. and its efforts to boost its online display advertising revenue.
On Wednesday AOL reported its revenue tumbled to $551.4 million in the first quarter, a 17% decline from the year-earlier period. Advertising revenue fell 11%, to $313.7 million.
There were some bright spots in the quarterly results, however. The company's online display advertising was up 4%, to $130.5 million, its first quarterly increase since 2007.
Another bright spot related to display advertising was the announcement that Hearst Corp. had partnered with AOL's Pictela unit to deploy the Interactive Advertising Bureau's Portrait format. Hearst plans to use the 300-by-1050-pixel rich media ads on the websites of its magazines, such as Cosmopolitan.com and Esquire.com.
On Tuesday, AOL's Jay Kirsch addressed the American Business Media 2011 Annual Conference in Austin, Texas, focusing on AOL Industry, an online b-to-b media business unit that the company will officially debut later this month. Kirsch is VP-general manager of the group.
AOL Industry's first vertical, covering the energy industry, will debut this month, Kirsch told the audience at the ABM conference. Another vertical, covering defense and government IT, is slated for a June launch.
AOL has been hiring journalists from established b-to-b media companies. Among the hires: Peter Gardett, formerly bureau chief of Argus Media, is managing editor of AOL Energy; Colin Clark, formerly editor of DODBuzz, is editor of AOL Defense; and Wyatt Kash, formerly an editor at 1105 Media, is editorial director of AOL Government.
Kirsch said that for the first year the revenue model will be “strictly advertising [-driven],” in part by the availability of the Portrait ad format. “It plays a very key role,” Kirsch said. “The type of messages that trade advertisers are trying to get across are often far more complex than the ones consumer marketers are.” He said the Portrait format, which can contain video and other media, enables marketers to provide more detailed information.
AOL Industry will take some new approaches to b-to-b media, Kirsch said. The open design will feature large images and, in addition to traditional journalism, the site will feature aggregation and content contributions from industry vendors. “We want to have trusted vendors as part of the conversation,” Kirsch said.
Additionally, AOL Industry is looking to tap into social networking. For instance, using open APIs from LinkedIn, AOL Industry will enable users to “personalize” their experiences on the site. “We wanted to get away from social being a button,” Kirsch said.
AOL's foray into the domain of ABM members was met with some skepticism. During the Q&A period following Kirsch's presentation, an ABM member said the AOL project reminded him of VerticalNet, an online business that threatened in 1999 to turn traditional b-to-b media companies into “dinosaurs.”
Kirsch laughed at the suggestion, noting that he was not on stage trying to “scare” the industry like VerticalNet CEO Mark Walsh did in the days before the dot-com crash. “VerticalNet could have succeeded if it started seven years later,” Kirsch said. “We're just trying to be a journalism company. We have real professional journalists that we're hiring.”
In the panel following Kirsch's presentation at the ABM conference, Don Pazour, CEO of Access Intelligence, which serves the government and energy markets, named a low point of the conference for him. “My least favorite part of the conference,” he said, cracking wise, “was AOL entering two of our markets.”