AOL, MSN unleash $580 mil slugfest

By Published on .

Most Popular
AOL Time Warner's America Online and Microsoft Corp.'s MSN square off this week in an estimated $580 million marketing battle for consumers' attention as they trumpet the latest versions of their Internet services.

The media blitz for AOL 8.0 and MSN 8-a mix of TV, print, outdoor, online, e-mail, retail promotion and guerilla marketing antics-is expected to be so vast that most people will find it hard to ignore.

AOL will spend an estimated $30 million in media to launch 8.0, plus $100 million for other marketing activities. MSN will spend $300 million through June 2003 doubling last year's outlay, but exec utives declined to specify how much of that is dedicated to media.

AOL's campaign for 8.0, its most extensive ever for a product launch, will run through early January. The torrent of media includes online promotion across the AOL service and the AOL Time Warner stable of Web properties to the tune of 12 billion impressions; distribution of 8.0 software at 40,000 retail outlets including Wal-Mart Stores, Home Depot and 12,000 U.S. Post Office locations; and inserts in several Time Inc. magazines. Radio ads are planned in select markets and outdoor ads mount in November on bus fronts and shelters. Tie-ins include the National Football League and New Line Cinema's forthcoming "The Lord of the Rings: The Two Towers," as well as promotion on selected DVD and VHS releases. And it wouldn't be an AOL product launch without a massive disk drop; 100 million will be mailed. "We want to make it extremely easy for people to try our product and as long as the economics stay as attractive as they are, we will continue to do so," said Joe Redling, AOL's president-marketing.

Of its 26 million U.S. members, AOL said 1.8 million have requested that the service alert them as soon as 8.0 is available for download. AOL expects 40% to 50% of members to upgrade to 8.0 by year's end. Currently, about half of AOL's U.S. members use AOL 7.0, 25% use 6.0 and the rest use 5.0 and earlier versions.

MSN trails AOL in members, with just 9 million. Microsoft declined to specify how many of those are U.S. members but said 50% of its subscribers are "switchers" from AOL and other services. Microsoft envisions using MSN as a digital hub through which to deliver software, services and content such as Xbox videogames over high speed Internet connections. While MSN 8 launches Oct. 24 with TV spots breaking in network prime-time shows, a billboard goes up today in New York's Times Square. Also today, a swarm of MSN butterflies descend on Superior, Wis., touting MSN 8's "Better with the Butterfly" campaign.

For AOL, beset by anemic ad revenues and ongoing federal investigations into allegations of improper accounting of ad deals, the stakes couldn't be higher. The company must use the programming-rich 8.0 to help it grow its 35 million-member service and lure marketers to new advertising opportunities. AOL 8.0 is also critical to moving existing subscribers and attracting new customers to AOL's broadband product and planned pay services. Industry analysts say broadband could be make-or-break for AOL, better known as the easy-to-use access brand for Internet newbies.

AOL on Oct. 15 breaks 15- and 30-second versions of "Arrival," a spot depicting kids, adults and teens engaging in various aspects of AOL's online community. A 30-second ad on parental controls, a teen execution and spots highlighting e-mail controls, chat search, match chat, and several personalization features are also planned.

interpublic haul

The dueling campaigns were created by Interpublic Group of Cos. agencies-AOL's at Gotham, New York, MSN's at McCann-Erickson Worldwide, San Francisco. Initiative Media does media buying and planning for AOL; Universal McCann handles media for MSN.

Ads for AOL 8.0 represent a major departure from AOL's typical testimonial-style executions.

"This [campaign] is an emotional platform to continue building the brand," Mr. Redling said. "We needed to move away from a feature sell. Consumers choose brands." With 8.0, AOL ditches the "So easy to use, no wonder it's number one," the company's tagline since 1996.

In this article: