AOL is currently re-organising its media brands, a source familiar with the situation tells us, confirming rumours.The restructuring is not a layoff.
Headcount at AOL media properties should remain the same, though some people may be replaced by others. Our source says current employees will likely have the opportunity to move to properties that fit the company’s strategy.
So which properties fit AOL’s “go-forward strategy,” as our source put it?
It’s a matter of fitting AOL content output with what AOL ad sales is good at selling.
What’s that mean?
Our source gave us a few hints.
AOL is good at selling mainstream audiences. AOL is good at big bang brand advertising. Cambio is working really well. AOL Sessions has struggled lately, but it does well, too. So does Moviefone, historically.
AOL is bad at combining multiple, similar, smaller audiences and selling them together as a bigger whole. For example, AOL has struggled to combine Joystiq, Engadget, and Fanhouse’s audiences together for bigger ad buys.
Cuts will not necessarily be related to audience size or quality of content.
In the end, which brands get cut comes down to a simple question. Does AOL have the ability to monetise the property? If no, it’s out.
AOL has already cut its 300 or so brands down to 37. During AOL’s most recent earnings call, CEO Tim Armstrong said the company is focusing on an 80/80/80 strategy. He said that:
- 80% of spending is controlled by women (thus that’s who advertisers want to reach)
- 80% of spending is influenced by influencers (again, that’s who advertisers want to reach)
- 80% of spending is local
AOL is aligning its properties to go after those three big buckets.
The realignment makes perfect business sense to us – even if the re-shuffling will, in the short term, damage already bruised morale in AOL’s media group.