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AOL and the HuffPo deal has been analysed upside down and inside out by various media outlets; Business Insider being no exception. But a vital element of the examination has been mysteriously missing from the long narrative regarding AOL’s road to content start-around. So let’s get to it.The digerati typically seem reluctant to ever discuss the convergence of tech, racial influence and revenue; but it’s a mega pink elephant in the room that will simply not go away because, like it or not, there are actual people between the 1’s and 0’s of technology, and they sometimes have very unique and particular behaviour and desires that often times stem from cultural influence and history very different from that of the mainstream. If a hamburger or a car company can face such issues, so too can our industry.
There’s no free pass just because one is dealing with technology. It’s not about morals (in this article, anyway), it’s about money. Let’s be real. There is nothing post-racial about the U.S. in 2011, and that’s OK as our nation continues on its path to maturity. But to move in a manner that is rather ambivalent to that fact is to risk missing golden business opportunities.
In America, the convergence of business and race is as much a part of our economic DNA as democracy is and to overlook it is a risky move that can lead a company down the path of irrelevance particularly as the browning of our country expands by the hour. It’s simple. Tap into it, and it’s a payday. Play it wrong, and you crap out.
So want to know how AOL can make the most of what they’ve got, when it comes to content gambling and even better position itself?
To do that, first we need to get clear about the overall playing field. As already mentioned, the African-American and Latino population segments in our country are growing in terms of sheer population while the Caucasian market is shrinking (source: U.S Census Bureau). These segments also skew younger than that of the Caucasian market (source: Nielsen) and is growing in terms of on-line usage while that of the mainstream begins to stagnate (source: eMarketer).
Don’t shoot the messenger; these are just the facts. In addition, by all indications this segment also accesses social media more frequently than the mainstream and, as well know by now, even out-index in population percentage usage on Twitter (source: Arbitron) (which, by the way is currently stumbling in proper use of this phenomenon to its business benefit as well, but that’s a matter for another article).
Now, if AOL wants to build a huge new content business, and by all indications, it does; then it needs to cultivate an alchemical handling of the aforementioned elements to create precious gold.
This publication previously noted that as of Q4 ’10, AOL’s content business looked something like this:
$600 million of revenue (annualized), shrinking 8% per year.
It was said, “…AOL’s content business alone could be worth 6X-7X revenue, or $3.6 billion-$4 billion on the $600 million of revenue. (To do so it will need to create) content brands it can bolt onto its ad sales and technology infrastructure.” But the only way it’s going to do that is to be sensitive to content desires for a diverse digital population and, thereby, draw in more and more traffic. Sensitive, not in the future. Now.
One of AOL’s biggest content mistake at the moment isn’t not churning out enough content overall but not churning out a greater breadth of content. It’s cool that Black Voices, et al exist. But separating Black and Latino content solely into isolated brands is 20th Century business thinking. Much like the physical world, there is the desire by that demographic for both specific voice and inclusion. So spread it around and get all the page views. “Double your pleasure”, and that could just lead to a double your money phenomenon. In looking at the niche AOL content brands, even the stock art used is disappointingly and woefully one ethnicity across the sites, let alone perspective (save the music-related sites, as might be expected). This change alone could increase traffic exponentially across sites for them, while still offering the culturally specific brands.
And, of course, in addition to the “towns” we all know that AOL now has a major general news brand (HuffPo). Always on the cutting-edge, Arianna Huffington seemed to get it for her brand before the courtship of AOL even began: what we used to think of as the mainstream is fast transforming; hence this as-yet-unformed idea of the off-spring known as “Huffington Post: Global Black.” But what’s interesting to note is slight debate/assumption that if Huff Po Global Black becomes a brand then there seems to be a question about the need for AOL’s Black Voices.
If TheDailyBeast.com, Huffingtonpost.com, Politico.com, MSNBC.com, Glamour.com, Vogue.com etc etc etc can all exist simultaneously under one corporate roof and/or in the market, why then would there ever be any question about the number of content offerings for a population segment that is actually growing? Instead the questions should be: How will it staff these culture-specific sites? How will it budget for them? How will it create distinct different voices for them? How will it sell them to advertisers? Contrary to popular belief, there are actually a variety of segments within Black and Latino demographics.
Thinking about us as a clump is to leave money on the table. There’s the young and edgy, traditional, male, female, family-oriented, single, etc. If handled properly, AOL could have the opportunity to control a large part of the entire diverse content narrative (as offered by a corporation, at least), if it taps into these sub-segments, re-shapes BV, births Global Black, refines AOL resonance with Latinos and executes everything properly. Oh, and just a tip as we move into a new decade: not everything targeted to the market need hold the actual word “Black” or “Latino” in the title any more than we see “White”, “Caucasian” or “Human” in other content titles. Let’s be more creative in our thinking.
For all of this to work, though, there will be the for need a hip personality or two actually from the market for the market, if it’s to truly be seen as organic and relevant. Arianna may need to share just a small ray of her large, bright sun in order to stir the pot; and she doesn’t seem like she’d be adverse to such a thing since she knows winning the game is what matters.
Finally, if all this strategy and content is wrapped up with a mobile bow; that could be a beautiful gift to stock holders. Nielsen just released stats that show that people of colour are more likely to own smartphones than the Caucasian demo in the U.S. http://bit.ly/dSfXqp These statistics become even more compelling when one adds them to the Target Market News Report on the buying power of Black America since it documents that African-Americans spent a breath-taking $9.4 billion dollars in 2009 on mobile phones and service (an increase of 30% from the prior year). Mix and stir with the right content and marketing approach, and it’s a sexy and profitable offering.
To make it happen AOL will need not only new high-level execs/consultants with cool start-up/business experience but those who also posses cultural savvy, hipness, mobile innateness coupled with on-line expertise and a sophisticated global perspective.
By doing this–and only this–will AOL really become content company for the “technicolor” 21st Century. Of course, this is just one digitalist’s opinion.