AOL CFO Artie Minson just told a conference audience in Florida that premium ad sales growth won’t start showing signs of life until Q3.
He said AOL will take a hit in Q1 and Q2 because it’s not going to buy as much traffic and because of a massive re-org to its sales force the resulted in about 80% of accounts changing hands.
Artie said the point of the ad sales re-org was to remove a management layer that wasn’t actually focused on sales, and to re-organise sellers into industry channels.
Here are our the rest of our notes from Artie’s talk. (NOTE: unless we’re using quote marks, we’re paraphrasing):
8:10, Artie is explaining AOL’s local news network Patch, and how it will expand rapidly this year.
8:15, Is AOL a buyer or a seller?
8:15, Artie says “I think you’ll see us be a disciplined buyer and a discplined seller.” Our current credit agreement caps us at a $100 million buys. StudioNow is the type of deal you’ll see, it helps tech and brought in a great management team. “We’re out of the Hail Mary business.”
8:17, You’re focused on growing display market size. How do you grow that as you churn subscribers off paying service?
8:18, Managing yield is the biggest opportunity we have: selling to the right advertisers at the right prices. We’ve changed our ad sales incentives toward selling premium. Previously, we sold too much into the ad network. Unique visitors have been flat over the last year, despite declining subs. You will probably see some bumps in the road on 2010.
8:20, How will Ad.com fit in with the ad exchanges?
8:20, Right now its one of the biggest customers in the exchanges. We’re complimentary with the exchanges.
8:21, Domestic display will be down in Q1. What happened?
8:22, Business development deals are declining. Despite a massive re-org of our ad sales force (re-assigned 80% of our accounts), that business is doing pretty well.
8:23, What will AOL look for in a new search deal?
8:24, The market for these types of deals have become more competitive since the last time AOL did a search deal. However, we won’t squeeze every nickel out of Google on the search side of the equation, but lok for things that help our strategy.
8:26, What will pricing look like on the access side over the next couple years?
8:27, Couple things to point out: If you increase price it increase churn. We might start doing some promotional deals with other dial-up providers.
8:30, What are the key metrics the street should use to track the progress of AOL in 2010?
8:30, Did they get cost of out the business? Did they get out of assets they shouldnt’ hold anymore? Were they careful with acquisitions? Did they integrate tech on the content front? In the back half of the year, how’s the core display business? Are products and services getting better? You will begin to see more of the feeling that AOL is a company that’s playing offence. The feeling inside of the company is much different than it was 6 months ago.
8:31, Questions are opened up to the audience.
8:32, What will be the impact of the sales re-org?
8:32, We took out almost an entire layer of ad sales that had not been focused on selling, but on managing. What we did structurally was organise teams into industry-focused groups. What that’s caused in the short term is we’re moving accounts around. What we’re focusing on are the handoffs. We’re not focusing on new business as much because of that. My expectation is you’ll see some of that in the first quarter. (Though the real decline has to do with revenue streams that aren’t premium ads.) This turmoil will last into the third quarter of this year.
8:34, Artie says we are opening up sales channels into the middle market, beyond the 1,000 or so advertisers we currently have. Tim is public about how low the number of advertisers AOL deals with was.
8:36, How is video display advertising becoming a bigger part of the company?
8:36, Artie talks about StudioNow, it’s freelancer’s platform for video producers. If there’s something we can create video around for advertisers, we can do a call for content. We can source it and then create compelling ad experiences to match those two together.
8:37, the session is over.
Business Insider Emails & Alerts
Site highlights each day to your inbox.