AOL Ad-Ing It Up
By STEPHEN LYNCH
Suffering online service AOL plans to double its advertising budget next year and will kick off a new campaign by sponsoring the Super Bowl half-time show on Feb. 1.
AOL is spending anywhere between $7 million and $10 million to sponsor the MTV-produced show, sources said. Janet Jackson and OutKast are rumored to be performing, “and there will be as much branding as possible,” an AOL executive said.
The deal includes five 30-second commercials, two before the game and three during – an unusual level of saturation by one company.
AOL is trying to juice up its image as it continues to struggle to build membership.
Parent Time Warner recently dropped AOL from its own name.
In the past, the company concentrated on online and direct-mail advertisements, “and lots of our ads were barter, and only seen on cable,” the executive said.
That changed this fall, when AOL unveiled prime-time television commercials featuring its yellow running-man logo and artists such as Snoop Dogg. It also poked fun at its own previous marketing campaigns, including its ubiquitous discs.
In September, AOL sponsored a free concert by Dave Matthews in Central Park and bought out a day’s run of The Post, distributing the paper for free.
AOL is doubling its advertising budget to $200 million in 2004, with a greater emphasis on television and special events, the executive said.
David Card, an analyst with Jupiter Research, said AOL has done a good job so far in transforming its marketing image.
“If you look at their ads, as compared to [the Microsoft Network], they’re very good,” he said. “They’re doing a better job than your average Internet company.”
But AOL’s main challenge is shoring up its crumbling subscriber base, Card said – not necessarily attracting new users. The company has lost about 700,000 subscribers this year.
“What AOL has been desperately trying to do is convince customers to keep paying them. The best way to do that may be online, not on TV,” Card said. “That’s where this is puzzling.”