AOL's Web Sites Show Gains in TrafficA yearlong effort by AOL to transform its content Web sites into crowd-pleasers is beginning to pay off.
Traffic to the sites -- including AOL Money & Finance, entertainment, and the male-oriented Asylum -- grew 15% to 56.5 million unique U.S. visitors in the first quarter from a year ago, according to comScore Media Metrix. Measured by traffic, some of the sites even top the charts for their categories.
AOL still hasn't translated the surge in visits into higher ad revenue. But the news is positive for the Time Warner Inc. unit, which has struggled with another initiative -- building AOL into a major digital ad-sales firm. When Time Warner reports earnings next week, AOL is expected to post a weak first quarter, with ad revenue that is flat to slightly down.
The content push is part of AOL's bid to reinvent itself as an ad-supported Web company following its August 2006 decision to make its Internet-access service free. Visits to AOL's Web sites slowed as a side-effect of that decision. Many of the visitors had been paying subscribers who logged on to check email and then looked at other AOL features.
To draw visitors back, AOL redesigned sites in the news, sports and health categories. It also created a half-dozen new sites that don't use the AOL name, such as a technology-focused site called Switched, a hip-hop site called BlackVoices, and a Web trend tracker called Urlesque.com, as well as Asylum. Dropping its name was an acknowledgement that the brand wasn't hip enough for the consumers AOL was trying to attract. "If I call a hip-hop site AOL Hip Hop," says Bill Wilson, executive vice president of AOL Vertical Programming, "that just won't resonate with consumers."
AOL also adopted some common tricks of the trade, such as making its sites appear higher in search-engine results. As a result, a recent Google search for "money and finance" listed AOL's Money & Finance site as the top link. AOL hadn't turned to the technique before because it relied on paying subscribers to visit its pages.
Not every site has shown improvement. AOL's kids site, which faces tough competition from Walt Disney Co. and Viacom Inc.'s Nickelodeon, had a slight drop in unique U.S. visitors in March. AOL says it updated the site but hasn't focused on it as much as its other sites.
AOL is relying on its Web ad-selling unit, Platform-A, to market the sites to Madison Avenue. With that in mind, Platform-A announced Thursday the launch of a spot marketplace for online display and video ads, similar to the one that exists in the TV market. Advertisers will be able to bid on unsold inventory on all AOL sites and across the network of thousands of sites where Platform-A sells ads.
But some Madison Avenue executives believe AOL's programming strategy will be a tough sell. "It's not to say that AOL can't do it, I just think there's a challenge," says Ian Schafer, chief executive of Deep Focus, an independent digital marketing firm.
By: Emily Steel
Wall Street Journal; April 25, 2008
