Online Strategies: AOL recruits sales veterans for battle with Yahoo!, MSN

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Looking to boost sagging online ad sales, AOL Time Warner's America Online appointed two veteran sales executives to head agency relations and to convince marketers to spend more money on digital media.

AOL appointed Richard Porter, 44, as exec VP-sales, interactive marketing, and Michael Barrett, 39, as senior VP-agency relations, international and partner relations; both will report to Robert Friedman, president-interactive marketing.

The appointments follow similar moves at rivals Yahoo! and Microsoft Corp.'s MSN, both of which re-tooled their online sales and marketing structures. For AOL, the moves are critical as it concentrates resources on developing cross-platform media packages for advertisers. AOL's challenge is to convince marketers to devote a larger portion of their budgets to online and to prove the medium's return on investment.

Mr. Porter joins AOL from, where he was senior VP-sales and marketing. He will manage the day-to-day sales operation. Executives who oversee such categories as automotive, package goods, travel and entertainment, will report to him.

Mr. Porter's background is a mix of old and new media with a focus on mass audiences-a mix that Mr. Friedman said is an advantage. His resume includes a stint as exec VP-general manager of Gemstar-TV Guide International's TV Guide Media Sales, as well as publisher of Reader's Digest and Prevention.

full-court press

Mr. Barrett's appointment reflects the focus by Internet networks to court big marketers and secure ad dollars without bypassing agencies. "We're showing up in every media plan. Ten of the top offline advertisers are on AOL, so this needs to be a greater emphasis," Mr. Friedman said.

Mr. Barrett previously worked at Official Payments, a provider of electronic payment options to government entities, where he led business and corporate development and marketing. Prior to that, he was director of e-commerce for Yahoo! and senior VP-sales and strategic partnerships at GeoCities. He has also held sales posts at FamilyPC, Disney Online, Newsweek and Meredith Corp.

Mr. Friedman said the new hires are the result of a reorganization of the interactive marketing unit over the last few months to improve the way AOL sells digital media packages. "We're trying to create some integrated packages ... so when you're working with an eBay, you're not just selling eBay, you're integrating it overall into AOL," he said. AOL and eBay have a marketing agreement that allows AOL to sell third-party advertisers onto eBay and promotes eBay across AOL Time Warner media properties.

"The consumer is spending 11% of his time online and marketers are only spending 1% of their budgets against this [medium]," Mr. Friedman said. "The medium can get the consumer's attention, it can answer questions directly and it can actually transact. The problem is that we haven't communicated, as an industry, the credibility of this medium."

AOL Time Warner does not break out online ad revenue in earnings reports but lumps it in with e-commerce revenue. A recent report by Merrill Lynch analyst Jessica Reif Cohen noted that while AOL's subscription revenue growth increased 17% in fourth quarter 2001, ad/e-commerce revenue declined 7% to $637 million. America Online's revenue and earnings before interest, taxes, depreciation and amortization both rose 10%, to $2.3 billion and $717 million, respectively.

Fast Facts

Company: America Online

Challenge: To sell advertiser-friendly cross-platform ad packages

Solution: New hires Richard Porter, exec VP-sales, interactive marketing; Michael Barrett, senior VP-agency relations

Reporting to: Robert Friedman, president-interactive marketing


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