You could be forgiven for wondering why Michael Steckler joined AOL UK from Microsoft last July. For the past few months, it has been portrayed as the sickly runt of the Time Warner empire following its decision to sell off its internet subscription business (The Carphone Warehouse acquired it in the UK) to focus on an ad-driven content model.
In October, AOL announced plans to cut around one-fifth of its global workforce (some 2,000 jobs) after second-quarter ad revenue growth was slower than expected. On a local level, executives seemed to be deserting AOL UK at an alarming rate.
The managing director, Andy Jonesco (who left for BSkyB), was joined by the head of commercial development, Phil Guest, and the sales director, Giles Ivey, in heading for the exit. Compared with the hype surrounding social networking sites such as Facebook and even rivals such as Yahoo! with the launch of its Panama platform, AOL was looking jaded.
But perhaps these negative reports don't fully reflect the potential that surrounds the business. Steckler, initially appointed as the vice-president of interactive marketing, was promoted to managing director, replacing Jonesco, in September. A series of positive announcements were to follow.
First, Truveo, the video search engine acquired by AOL in 2006, was relaunched. Then AOL revamped its aol.co.uk homepage, offering improved navigation and personalistion to users. In November, it launched its mobile portal service (wap.ao.com/uk), which combines e-mail, web and content channels. Importantly for advertisers, it then reorganised its Platform A advertising division to consolidate sales for its previously separate AOL, Tacoda and Advertising.com.
With an increased investment in content on the portal, Steckler believes these developments put AOL in good shape for the future. "We are changing the culture to be more focused on the customer and the advertiser. Media brands, and particularly trusted media brands in the online world, are becoming more important," he says.
Steckler joined AOL after eight years at Microsoft, latterly as the development director across Europe for MSN. He started his media career, after gaining a politics degree, at Haymarket Publishing, selling ad space to the print and horticulture industries on Print Week and Horticulture Week ("If you can do this and can deliver numbers, then you can do anything," he says).
He spent a period selling outdoor at Clear Channel before the move to Microsoft, which he says suited him because of his "passion for technology and the ability to shape things". So what tempted him to AOL? "The big difference at AOL is that it is very focused on the customer acquisition model for advertisers and very business-focused on advertising-driven solutions."
He says behavioural targeting will become increasingly attractive to advertisers and believes AOL is in good shape to educate advertisers following its acquisition of the behavioural targeting specialist Tacoda.
In content terms, Steckler claims AOL's blend of news and entertainment attracts a core audience of 25- to 44-year-olds. Its celebrity news content is pulling in a strong female audience, he says, and driving traffic to other areas of the site, too. He says the site's strong finance offering will continue to evolve and that the opinionated, vocal nature of the AOL audience is ideal for developing greater levels of community content.
AOL claims a 94 per cent reach of the UK internet audience through its assets. But it will have to grow a loyal audience now the subscription model has ended. It has a market share of 2.06 per cent of the UK portal market (according to Hitwise figures to 29 December), compared with MSN UK's 27.8 per cent and Yahoo! UK's 22.9 per cent.
Room for growth, then. However, it is innovating to build its audience. Steckler says of the recent mobile launch: "Mobile is central for a number of reasons - the ad business is changing irrevocably and we have to be able to deliver against it. The iPhone shows the huge opportunity for mobile ad revenue - we're moving towards our content and services being mirrored on a mobile device."
He says he has spent a high proportion of his time understanding who is using AOL and how to deliver content against this. But what will agencies see? "Our sales operation is very good: I'm not one to rest on my laurels, but what I saw was a gap in online in terms of service. We have restructured to see a scaleable operation in terms of support - agencies want quick answers, so we have shifted in terms of resource and scaled up."
AOL has a core sales team of 75, a significant increase on a year ago. Steckler argues that its key role is to attempt to demystify online and "join up the dots" with other media. This explains the appointment of the former GCap director Duncan George as sales director. "He has cross-media experience," Steckler argues. "Online is seen as complex, but is very similar to other media. I'm confident that this will be seen as the position within six months."
Steckler is also keen for AOL's sales team to increase its handling of third-party sales contracts (it oversees sales for sites including Habbo Hotel and MapQuest). However, the main aim for 2008 is to demystify online advertising and applications, such as behavioural targeting. It will be interesting to see if revenues follow.
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