AOL BEEFS UP ITS RICH MEDIA CAPABILITIES

Reorganized Sales Staff to Push Flashier Online Ads

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NEW YORK (AdAge.com) -- While AOL's woes can be attributed in part to the anemic interactive advertising climate, the service's inability to accommodate enhanced online ad formats -- known as rich media -- has significantly limited the range of digital programs it can deliver to marketers.

But by Sept. 1, the interactive division of AOL Time Warner hopes that will change, as software engineers have worked over the last several months to modify the infrastructure that left AOL unable to run digital campaigns loaded with 3-D graphics, streaming audio and video, pop-ups and a variety of interactive promotions.

Reorganized sales staff
AOL's newly reorganized sales staff "is now going out and selling rich media programs. We couldn't support flash-based [technology applications] before," said Chuck Gafvert, vice president of ad technology for AOL's interactive marketing unit.

"We've been working for over a year to build new functionality. ... The proprietary authoring platform of the AOL service prevented AOL from accepting rich media formats," he said, which include Eyeblaster's expandable ad banners and other providers' flash-based applications.

Eyeblaster, Bluestreak, Eyewonder and Enliven interactive advertising formats have been accepted on AOL Time Warner Web sites such as TeenPeople.com but not on the AOL service, which is text heavy and requires swift delivery of content to 34 million subscribers.

Superstitials
The AOL service also

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does not accept one of the most popular rich-media formats, Unicast's Superstitial. "We are looking at how to implement it," Mr. Gafvert said.

AOL's expanded relationship with Viewpoint Corp. will enable the service to offer marketers the ability to implement in-banner, out-of-banner and beyond-the-banner programs. The Viewpoint technology allows AOL to emulate many of the functions of Eyeblaster and other providers of rich media.

3-D 'ZoomView'
A summer promotion between Warner Bros. Pictures' Scooby Doo and Six Flags Theme Parks integrated 3-D technology from Viewpoint. The "ZoomView" application allowed viewers to get a close look at various aspects of Six Flags parks as they play a game to find Scooby. AOL demonstrated for Advertising Age a mock-up in-banner execution for Duracell that incorporated a 360-degree rotation of the batteries. A Godiva out-of-the-banner example showed chocolate truffles and invited viewers to "Experience our truffles in 3-D" by clicking on a button.

Recently, Gap Inc.'s Old Navy used AOL's new capabilities to promote its "Rugby Bunch" campaign. "We felt it was a great opportunity to extend our television advertising in a way that was truly interactive, memorable and fun," said Jonathan Finn, director of public relations and field marketing for Old Navy.

AOL hopes such rich-media capabilities will garner new ad revenue. It will charge a premium for out-of-banner and beyond-the-banner rich-media formats, of which there is a limited inventory. However, there will be no special pricing for in-banner rich media.

Version 8.0
AOL's ad and commerce revenue for the second quarter was down 42% to $412 million, or $362 million after revenue from AOL Time Warner sibling units is factored out. The incorporation of rich media advertising on the AOL service is particularly important as the Oct. 23 launch of AOL 8.0 draws closer. AOL is banking on rich media, along with efforts at content aggregation and new consumer features and services on 8.0, to lure gun-shy advertisers.

"Part of the resistance from marketers is the uncertainty over how to use the [Internet] medium to achieve retention, trial and demand generation," said David Rheins, senior vice president of interactive marketing, AOL.

Contextually relevant online environments that ask viewers to enter a sweepstakes to get a free trial of something, while intrusive, can be engaging and entertaining, Mr. Rheins believes, citing a PopSecret Popcorn beyond-the-banner program on InStyle.com.

"The auto industry wants branding, but it also wants to qualify leads and drive retail traffic to dealers, [while] consumer package goods wants to do sales promotion," Mr. Rheins said.

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