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Summary:

Just ahead of this week’s AOL (NYSE: AOL) Q2 earnings, CEO Tim Armstrong has shed another batch of executives, most notably global ad sales…

Jeff Levick

Just ahead of this week’s AOL (NYSE: AOL) Q2 earnings, CEO Tim Armstrong has shed another batch of executives, most notably global ad sales head and former Google (NSDQ: GOOG) colleague Jeff Levick. Instead, Ned Brody, the head of the Advertising.com Group, will be AOL’s chief revenue officer, a new post.

An AOL rep tells paidContent, “Today’s move simplifies our structure and better positions the company to deliver on our growth strategies. We have stabilized the foundation of the company over the past year and are now fully focused on executing on our core goals – leading in digital content, including mobile and video, and leading in brand advertising.”

In addition to Levick’s departure, first reported by AllThingsD and AdAge, Lauren Hurvitz, who was hired to replace long-time AOL communication head Trish Primrose-Wallace last fall, is also out along with human resources executive Kathy Andreasen.

These latest moves come at a time when AOL’s display ad business had finally shown signs of turning around. Plus, AOL was fully rolling out its Project Devil interactive ad units across its system and with outside publishers, including Hearst. Levick had been the main force behind Project Devil.

CEO Tim Armstrong, who brought in Levick, formerly a close Google colleague of his, to run advertising shortly after he arrived at the company in the spring of 2009. In a staff memo, Armstrong said Brody would hold as dual role as CRO and president of AOL Advertising. Brody will oversee AOL’s global owned and operating advertising, its global network business, sales and publishing products.

Armstrong outlined three goals with this change: to create a unified, premium strategy for advertisers and publishers. Two, to establish consistent growth in advertising dollars across all AOL properties and networks. And third, to develop a more rigorous approach to advertising and publishing system design.

Even with the comeback in display, AOL still faces significant challenges on its advertising business, even as all the pieces of the strategy its been building for the past two years finally seemed to come into place. Apart from the approach, the constant uncertainty and upheaval have opened up a well of morale issues for the company to manage. For example, as AOL was combining its existing sales team with that of The Huffington Post back in March, the company lost its top North American sales exec, Mark Ellis, who defected to Yahoo.

Although he was one of the prime builders of AOL’s current “premium” ad strategy, which is premised on offering larger, more creative display ads for major brands, Levick’s post had shifted twice. He had to share some responsibilities when David Eun, another Google alum, was hired as president of AOL Media and Studios in March 2010.

Then, last October, AOL once again changed the balance of power that governed its content, ad and e-commerce divisions by promoting Brody to COO of Media, Advertising and Commerce in addition to his post as president of paid services, a role he held for the better part of a year. That change appeared to put Brody above Eun and Levick.

After the HuffPo acquisition, which had Eun departing quickly, Brody appeared to be taking on an even greater role of charting AOL’s ad strategy going forward.

Clearly, AOL still felt a need to simplify its reporting structure, which is what today’s latest announcement is all about. In addition to advertising, public relations, marketing and human resources will be run a single organization run by Maureen Sullivan.

If all this was meant to send a positive message to investors three days before AOL’s earnings report, it apparently hasn’t sunk in yet, as AOL’s stock was down slightly an hour after the news first broke.

Tim Armstrong’s Full Memo is below:

Subject: Important Changes at AOL

AOLers –

As we continue the comeback of AOL we are focused on growth. We have a few announcements today that will make the company simpler, faster and stronger. Our strategy remains clear and consistent and our execution and operational clarity have improved. We have stabilized the foundation of the company and our future is about executing our growth strategies focused on:

1. Leading the digital content space
2. Leading the brand advertising space
3. Leading the premium video platform space
4. Leading the local content and advertising space
5. Leading the online membership services space

As we have focused our growth in this simplified product portfolio, we are now combining our advertising sales organization with our advertising network and products organization. We are not watching trends in the advertising business, we are creating them. Project Devil has traction and will help lead the brand space online. In the video space, we have gone from being out of the race to becoming one of the largest forces for digital video distribution.

The first announcement is a global structural change to our advertising business. We are promoting Ned Brody to the new position of Chief Revenue Officer and President of AOL Advertising. Ned will oversee AOL’s global O&O advertising, global network business, sales, and advertising and publishing products. There are three goals we are hoping to accomplish with Ned in this new position. The first is a unified premium strategy for advertisers and publishers. The second is consistent growth in advertising spend across all our properties and networks. The third is a more rigorous approach to advertising and publishing system design. This will allow us to connect Project Devil and our Premium Brand Formats to the O&O properties as well as the network.

In addition to our new CRO position, we are also announcing expanded leadership roles for five world-class leaders in our sales organization. Tim Castelli, Wendy MacGregor, Tim Richards, and Jim Norton will be promoted to SVP and Michael O’Connor will be promoted to VP, Head of Sales Operations. These leaders along with Don Kennedy, SVP of Advertising.com Sales, and Chris Heine, SVP of Advertising Operations will form our sales leadership team and join Ned’s management team.

As a result of this global change, Jeff Levick will be leaving AOL after a six week transition period. Jeff undertook one of the toughest jobs in the Internet space when he joined AOL. In the past two years, he developed a world-class leadership team, led the industry toward the future of premium formats for brand advertising, and helped lead a game-changing shift in perception and quality of the AOL advertising experience. Jeff is a friend to many of us and we know we will see big things from him in his future career. We have been working closely together on the design of the sales structure and we both believe it will positively impact results for our team and our customers.

The second announcement we are making is a streamlined GM structure reporting directly to me, overseeing the connection between content and monetization. The GM organization will allow us to profitably manage our investments in media and optimize the yield opportunities with traffic and revenue. We have already put the following GM leaders in place:

‐¢ AOL.com – Chris Grosso
‐¢ Huffington Post – Brian Kaminsky
‐¢ Entertainment – Kerry Trainor (e.g. Moviefone, AOL Music)
‐¢ Marketplace – Jay Kirsch (e.g., AOL Autos, Finance, and AOL Industry)
‐¢ Tech – Heather Harde (e.g., TechCrunch, Engadget)

Our third announcement is aimed at streamlining our corporate operations. Artie Minson, CFO of AOL and President of Paid Services, will now take on managing both our international planning and our Google search relationship, which is an important partnership on many levels. As part of Artie’s new responsibilities, he will be transitioning HR, Corporate Communications, and Marketing back to me.

We will be consolidating all marketing functions and the corporate communications team into a single organization run by Maureen Sullivan. Lauren Hurvitz will transition out of AOL as part of the consolidation. Kathy Andreasen is also transitioning out of the company. Lauren and Kathy have been big champions for AOL and trusted members of the management team. Sandy Mott will assume the role of interim head of HR. We will also be opening up a search for a Global Head of HR.

The future for AOL is getting brighter and we are on the path of returning AOL to growth. I care about our team and our AOL brand, our consumers and customers, and our long-term outcome – the announcements today have this at the core.

We have very clear operating plans for the second half of the year as we reviewed on the all-hands call a few weeks ago and we review detailed updates every week, and in some cases daily. We won’t be hitting the pause button this week, we’ll be on fast-forward.

We have an unprecedented opportunity everyday to positively impact consumers’ lives and our customers’ businesses. Let’s go make it happen – TA

  1. Take a look at this org chart of AOL so you can see how all the people fit together http://bit.ly/e4tByv

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