New Opportunities for Advertisers on AOL

A new CEO, new design, new strategy and now an earnings report that exceeded most expectations have gotten the new AOL off to a good start. Despite AOL’s short term win with its Q4 2009 earnings report, chairman and CEO Tim Armstrong focused his comments on the company’s long-term vision, noting that the results “reflect the need for our focus and execution on the work required in the turnaround of the company.”

The strong quarterly performance from AOL is a boon to advertisers, who already have much to gain by embracing the new AOL. That long-term vision will likely create even more significant advertising opportunities moving forward. Although AOL’s platform still has limited market share, a few new AOL solutions have been rolled out or are on the horizon. Retailers have already achieved impressive results with AOL’s sponsored listings, and AOL’s forthcoming Paid Inclusion offering has the potential to be a major game changer for advertisers across many verticals.

AOL Sponsored Listings
AOL Sponsored Listings enable advertisers to place text ads on selected sites that are part of the AOL network. Premium sites include AOL Finance, Time, Fox News, ESPN, Engadget and Pheedo, which is a feed advertising network similar to Feedburner. These also offer advertisers more flexibility than some competing properties by enabling advertisers to target specific sites, similar to the Google Content Network (GCN), rather than forcing advertisers to target based strictly on content as Yahoo! Content does. Performics has seen strong impressions (several hundred thousand impressions per month for high volume keywords) and click traffic for actively managed AOL Sponsored Listing campaigns over the last few months. The additional flexibility offered by AOL to optimize bids across sites and not just keywords provides advertisers with a wealth of strategies and optimization tactics to employ.

In addition to giving advertisers more flexibility, lower levels of competition also keep AOL costs in check and position advertisers for success. Several campaigns, for example, have achieved profitability, delivering better than 1:1 returns, so don’t expect competitors to shy away from AOL for long. Although costs-per-click (CPCs) on the AOL network are comparatively lower than other site targeting opportunities like the GCN and Yahoo! Content, more advertisers are certain to join the AOL party as they begin to catch wind of the strides being made there.

AOL Paid Inclusion
With the termination of Yahoo! Search Submit Pro (SSP) at the end of 2009, a paid inclusion void exists in search that may be filled by AOL Paid Inclusion in the near future. Although not yet concrete, AOL has indicated that more information is to come about AOL Paid Inclusion for advertisers including pricing, features and benefits. This will likely be a feed-based program similar to Yahoo! SSP and will enable former Yahoo! SSP clients to mitigate potential sales losses from SSP’s termination. Many advertisers successfully used Yahoo! SSP to index deep product pages, run promotions in SEO and grow sales. Once the new AOL product hits the market, many hungry advertisers will be ready to test and optimize paid inclusion feeds on the new solution.

At roughly six percent, AOL’s current search market share represents a lucrative opportunity for advertisers. Those that test the new AOL in 2010 will be well positioned to make the best decisions of how to most efficiently and effectively allocate budget across all of the engines moving forward.

In the meantime, advertisers already using AOL will take the expected news of AOL’s success in stride as they look longingly toward future products and platform enhancements in the year ahead.

Craig Greenfield ([email protected]) is vice president, search and performance media for Performics.