AMERICA ONLINE TED LEONSIS

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No news was actually good news for those expecting to see more America Online TV spots this year. That's because subscriber acquisition at the company was booming.

AOL President Ted Leonsis told Advertising Age his company had underspent on the ad medium with the broadest reach, TV, with millions left over from the total marketing budget it could have used during 1995-96.

The reason: Subscribers were coming on board so quickly.

"We toned down marketing because we wanted our customers to be happy," he says, fearing the service could have overloaded.

The company and its flagship online service brand America Online (it also operates GNN and an intranet and business services division) upped subscribers 33.3% to 6 million during the year.

The 39-year old Mr. Leonsis views his service as a cable-like entertainment network and says the credit he takes comes from rejecting 1995's conventional wisdom: the World Wide Web will cannibalize online business and multiple price options can segment an online company's market. He also says he began to see AOL's purpose (and marketing message) shift from a community theme to a lifestyle one.

"We've made AOL become a lifestyle," he says. "An indication is that we're selling a lot of AOL-branded merchandise. Not many people buy IBM T-shirts."

Now the company plans to bring out more branding from TBWA Chiat/Day, New York, late this summer.

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