AOL CEO Randy Falco Likes His Scale, Network

At iMedia, Asks Marketers to 'Help Us Find Our Version of 30-Second Spot on the Internet'

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BONITA SPRINGS, FLA (AdAge.com) -- It was logical. Randy Falco explained the real reason he jumped ship from NBC Universal to be CEO of Time Warner's AOL: "Isn't it better to be standing where the ball is thrown rather than scrambling to catch up to it?"
Randy Falco gave his first speech as chairman-CEO of AOL at the iMedia Brand Summit today.
Randy Falco gave his first speech as chairman-CEO of AOL at the iMedia Brand Summit today.

"My friends in traditional media are trying hard to understand the digital-media landscape," he said. At the same time, they're struggling with declining audiences and sluggish ad revenue growth. And while many networks have created their own websites, he said "these websites on their own will never scale up to AOL or Google or Yahoo."

Talking up the sector
Mr. Falco was giving his inaugural speech as chairman-CEO of AOL to a group of brand marketers and online media sellers at the iMedia Brand Summit in not-so-sunny southwest Florida this morning. And if there was any question if AOL was happy to be in the ad-network business, he put that to rest, touting AOL as the No. 1 display-ad network online and the No. 3 network overall. AOL owns Advertising.com and has been talking up the sector of late.

"The share of marketing dollars flowing to those top four [Google, Yahoo, MSN and AOL] is increasing," he said, adding that "the simple fact is it's hard to build a network with the scale of AOL."

Mr. Falco was brought into AOL with relatively little experience in the interactive space after more than two decades at NBC Universal, where he rose to the rank of chief operating officer. He poked a little fun at that fact when iMedia CEO Rick Parkhill asked him where he stores his six Emmy awards. "We'll see how much that helps on the internet," Mr. Falco said, laughing.

What he's learned
And he wasn't necessarily telling the interactive specialists in the audience anything they didn't already know when he detailed the things he had learned since coming on board to AOL: He's been struck by the incredible pace of technological change, the importance of the consumer who is now in control of everything online, the explosion of video and the growing importance of online networks.

"Terms like 'Web 2.0,' the 'long tail,' 'podcasting,' 'feeds' and 'mash-ups' didn't even exist in the practical sense just a year ago," he said.

AOL has invested heavily in building out a rich video platform, and Mr. Falco talked of tracking the movement of internet video into the living room.

"The abundance of internet video content poses another challenge," he said. "Finding it and monetizing it. Until now video search hasn't been particularly helpful." He said a big reason why AOL bought Truveo was so that "video search can become ubiquitous across the web." So far hundreds of developers have signed up, but the big question, he said, was how to monetize it.

Resting hopes on innovation
"I need all of our talent and creativity to innovate in this space. ... Help us find our version of 30-second spot on the internet. Define new interactive campaigns and make display ads more engaging," he said.

Mr. Falco was saved from answering a few more audience questions by a false fire alarm, but not before he got out half an answer to a question of whether he believes the internet will turn into a broadcast-TV-like landscape with a few big powerful players controlling the bulk of the budgets. (It won't, he said.)

"I think [the web] is capable of doing so much more," he said. "[A portal] is just one way to come through to the web. ... I don't see that there is going to be a dissemination of the audience [only] through portals."
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