AOL ONLINE ADVERTISING GOES DAYPART

New 8.0 System Lets Marketers Target By Time of Day

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NEW YORK (AdAge.com) -- AOL Time Warner's America Online, faced with faltering ad revenue and poised to launch its latest software, AOL 8.0, will take a new tack with advertisers by offering the ability to target its audience by daypart, much like a TV broadcast model.

AOL's move to sell advertising by matching key programming areas on both its dial-up and high-speed services to specific time periods coincides with its new approach to developing consumer-focused content bundles. AOL has more than 45 new online "shows" in development, all highly targeted to members' interests. AOL 8.0 debuts Oct. 15.

The move to sell by daypart is "a very strong indicator that AOL is realizing that it is no longer picking up the phone and taking orders. It's not just relying on the power of the AOL audience. ... It needs to be creative and reactive to this challenging marketplace," said Scot McLernon, executive vice president of sales and marketing for CBSMarketWatch.com.

Targeting users on Yahoo!
AOL isn't the first to try selling by daypart. Yahoo! has sold by daypart across the network and on its home page for more than a year, according to a spokeswoman. "The ability to target users during certain periods of their day is one of the many advantages of the Internet as a medium and one that clients have come to expect," she said by e-mail.

Microsoft Corp.'s MSN does not currently sell advertising by daypart. A spokeswoman said daypart targeting is one of the requests

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the service gets from advertisers and that MSN plans to address the issue. Key MSN properties MSNBC.com, Slate, CNBC.com and MSN Money each have high at-work metrics.

At-work Net users
Select members of the Online Publishers Association recently formed the At-Work Brand Network -- a group of online content providers spearheaded by CBSMarketWatch.com -- to lure advertisers to make bulk media buys on their sites during daytime business hours. An OPA study found that the at-work audience spends more money than the at-home Internet consumer. With 35 million members, the AOL subscriber base could be more valuable than it is by repackaging content and improved targeting.

AOL's dayparts break down to 6 a.m. to noon and noon to 6 p.m. It will also match programming to prime-time hours, 6 p.m. to 11 p.m. AOL plans a late-night component with AOL Music programming from 11 p.m. to 6 a.m.

"Our overriding goal was to be more relevant to our members and create a sense of consistency in the experience," said David Lebow, executive vice president of programming and strategy at AOL.

Customized welcome screens
With 8.0, AOL will be able flag specific programming targeted to daypart audiences. The software comes with several personalization features including the ability for subscribers to choose from one of six different welcome screens. A sports enthusiast might want a wrap-up of Monday Night Football action, and headlines would be flagged on the welcome screen at 6 a.m. on Tuesday. AOL plans to deliver a rundown of financial market action each Tuesday morning under a "Morning Money" icon. Sports junkies on Friday afternoons will see pundits' top sports picks heading into the weekend.

America Online CEO Jon Miller is expected to make premium pay services a centerpiece of the company's overhaul as the network struggles to grow beyond its Internet access roots. AOL hopes that these offerings, along with reprogramming the service, will lure advertisers to an increasingly valuable audience.

Rotating sponsors
While discussions continue as to the logistics of selling by daypart, AOL is exploring an array of options that mirror a TV sponsorship model. For example, AOL might have multiple sponsors for a particular program, rotating four advertisers in 15-minute slots throughout the program, said Michael Barrett, senior vice president of national sales at AOL.

"Advertisers would buy specific spots that would air on a program at a specific time," he said, adding that a daypart model allows advertisers to better target an audience. "It's a reach and frequency model vs. the [ad] impression model," of advertising on the service. Over time, AOL hopes to fetch a premium with dayparted advertising on the service.

Mr. Barrett said the AOL sales force has begun discussions with advertisers about the approach but declined to specify marketers. He said the concept holds appeal to the automotive and personal finance categories and quick-serve restaurants and that AOL hopes to have advertisers lined up by November.

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