Bob Pittman knows how to work a brand. He started with a music programming idea that became MTV and moved on to the creation of VH-1 and a relaunch of Nickelodeon with Nick at Nite.
Now president of America Online, which touts some 12 million subscribers, Mr. Pittman said the company spends about $500 million in marketing and advertising. "Everybody else wants to be where we are without spending the money," he said.
The competition shrank last year when AOL bought its chief online rival, CompuServe Corp. However, instead of making the brand disappear, AOL plans to leverage the strength CompuServe already has and catapult it ahead as the business person's AOL.
However, Mr. Pittman said the typical big Internet players--Yahoo!, Excite and Lycos search engines--aren't stepping up as competition. In fact, he said he sees the Big 3 TV networks as the biggest competitors for ad dollars. He points out that the average AOL user is already spending more time on the service than with cable networks like CNN or CNBC.
AOL has cut deal upon deal with advertisers in the last year worth hundreds of millions of dollars over several-year contracts. Cybermeals, Preview Travel, 1-800-FLOWERS and others pay anywhere from $4 million to $40 million to advertise on AOL.
"At the end of the day, we have to make sure our customers succeed--all of them," Mr. Pittman said.
Betcha didn't know: Mr. Pittman began his career at 15 as a disc jockey in Mississippi and was a program director specializing in turnarounds in Pittsburgh, Chicago and New York--all before he was 25 years old.
Copyright June 1998, Crain Communications Inc.