Feature

Steckler plots course for AOL revival

In the wake of AOL's recent £417m acquisition of social network Bebo, UK managing director Michael Steckler is confident of swelling the media giant's portfolio of brands.

AOL UK managing director Michael Steckler
AOL UK managing director Michael Steckler

When I interviewed incoming AOL Europe chief executive Dana Dunne last September, AOL's Hammersmith headquarters was a building site.

Much of the original structure had been knocked down and has since been rebuilt to become a worthy match for Google and Microsoft's Victoria bases and Yahoo's Shaftesbury Avenue HQ.

More importantly, AOL had its business to rebuild and, in the same month that the builders were called in, Michael Steckler, who joined AOL from Microsoft in July 2007, was appointed managing director.

With AOL's broadband supply business sold to The Carphone Warehouse and redundancies made in the UK (although AOL insists headcount has actually increased), the online media owner has re-engineered its operation to become an ad-funded business, focused on media agencies and advertisers.

Steckler says: "The sale of the access business in 2006 and the ambition to become an ad-funded business made me take notice. I thought it would be a good opportunity to join a company that is changing rapidly, and I wanted to be somebody who could influence that within the company.

"I'd seen the acquisition of Advertising.com in 2004 and then [video search site] Truveo, so I could see the steps that were being taken to grow the business in the right direction."

Fierce competition
Since Steckler joined, the time people spend on AOL has increased by 20% per visitor, and the average user looks at 200 pages - a figure that previously stood at 175. In a fiercely competitive market, AOL has increased the number of sites it sells ads on from 12 to more than 50.

However, the biggest development has been the $850m (£417m) acquisition of social network Bebo. Completed last week, the deal has spawned a new division called People Networks, to be led by former Bebo president Joanna Shields.

Founded by Londoner Michael Birch and his wife Xochi, Bebo's most successful market is the UK, meaning that AOL, unlike some of its rivals, is prepared to think and invest beyond the US market, specifically with the UK in mind.

Ten months in, with much groundwork completed, Steckler's ambition over the next year is to build a portfolio of brands.

With AOL and Bebo, two of online's biggest brands, in place, Steckler intends to increase that stable rapidly.

Firstly, AOL UK intends to launch US men's portal Asylum. Next on the list is Spinner, a US music blog that already has brand equity in this country - it was shortlisted for NME's music blog of the year.

Combine these new launches with AOL's ad targeting armoury housed in Platform A, and AOL looks like a company well set up to make a lot of money from advertising. These developments also make the dark days of just over a year ago, when senior staff were steadily jumping ship, seem a distant memory.

"There are things that we've got in play that will make us more innovative," says Steckler. "We've got a great brand that has fantastic engagement. AOL has always had that. I've been in online for nearly 10 years, and when we're moving to a world where time online, engagement and page views, rather than simply unique users, become more important, our focus is maintaining that position."

One opportunity that Steckler and his cohorts at sister firms IPC and Turner Broadcasting have failed to seize is to sell cross-company commercial deals, despite the Time Warner UK Advertising Council being formed for this purpose last year.

Deal maker
Steckler is confident that such deals can be struck soon, but it will take a change in priorities and the vision to look beyond immediate individual company targets. He has proved in his nine years in online that he can be at the centre of successful businesses, and it's easy to see why: he's confident, knowledgeable and a very likeable character.

However, he still has a job to do at AOL. For a company that has shifted its focus entirely to advertising, year-on-year ad revenue growth of 1% in Q1 2008 is not the figure AOL should be targeting if it is to compete with Google, Microsoft and Yahoo.

The AOL brand still suffers from its internet service provider legacy. By buying Bebo and partnering with hot online property Last.fm to launch AOL Radio, AOL has gone some way to improve this, but work still needs to be done.

Enthusiastic as ever, Steckler says: "We're confident about the trends we saw in Q1. We now have a larger team, our chess pieces are in place, and results should get better throughout the year."

After a couple of years of turmoil, AOL, with its new building and new sales team, is well-positioned to become a success story once more.

A strong AOL makes UK media a more diverse environment and, with Steckler at the helm, it is likely to get stronger.

CV
2007
Managing director, AOL UK
2000 Director of planning and development for EMEA, Microsoft
1996 Head of agency sales, Clear Channel International
1994 Sales rep to deputy ad manager at Media Week publisher Haymarket, working across What Hi-Fi and FourFourTwo magazines