AOL sets ad strategy

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America Online on Tuesday announced its long-awaited plan to bring more advertising into the online service. AOL said it would implement a cost-per-thousand pricing structure based on page views. It also will offer four types of marketing programs: "What's Hot" pointers to Web sites; ad space on AOL's Web site; sponsorship of seasonal and event-driven content; and custom programs designed for major advertisers. AOL also said it would, as expected, use Nielsen Media Research to audit its traffic for advertisers.

AOL is touting its ability to provide not only demographic and geographic data but also Nielsen research to advertisers. AOL claims it can reach more consumers than The Wall Street Journal, USA Today, The New York Times and The Los Angeles Times combined with its 6 million-plus subscribership. But unlike those print media properties, where users can happen on an ad simply by turning a page, many AOL ads won't be as prominent and will appear only when a user taps into an area that contains an ad.

Information on AOL's rate card is available at

Word of AOL's revamp began leaking out early this year. In February, AOL told Ad Age that it was moving to a CPM pricing model and would try to get its content providers to fall in line.

How successful AOL will be at attracting advertisers at this point is debatable; the company spent months figuring out what to do while potential advertisers spent big on Web sites. Now AOL has to go back to the advertisers and convince them it's still worth their attention.

Additionally, AOL has suffered a series of setbacks, financially and otherwise, which may cause some advertisers to think twice. William Razzouk, its president-chief operating officer, announced his resignation on Monday. AOL also said it would curtail marketing spending to focus on keeping current members happy. Many of those members are up in arms over AOL billing practices, and have filed a class action lawsuit against the company. The Federal Trade Commission also is investigating AOL billing practices.

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