Summary:

AOL CEO Tim Armstrong promised improvements in U.S. display ad sales processes, after international growth embarrassed domestic declines.

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photo: Staci D. Kramer

AOL CEO Tim Armstrong promised improvements in U.S. display ad sales processes, after international growth embarrassed domestic declines.

AOL’s Q1 total ad sales grew by five percent from last year’s corresponding quarter. But that was thanks to third-party network ads from Advertising.com and GoViral, of which AOL sold 23 percent more.

Ad sales on AOL’s own sites dipped by two percent – specifically, they were down by a percentage in the U.S. but up hard, by 34 percent, in the UK and Canada.

That dip coincided with AOL losing four percent of its unique visitors but, speaking to Wall Street analysts, CEO Armstrong blamed his sales team’s recent strategy:

“I was not happy with the domestic display over the course of Q1. We had a display strategy that was off-tune, now we’ve tuned it back up, we’re much more KPI-focused.

“We have a great sales team – we think it’s going to go up in the back half of the year – we have a more structured approach to a go-to-market strategy which is more data-centric.

“We’re focusing not on the old display market but the new display market” (video ads, Project Devil ads).

Price cuts at AOL’s ISP business resulted in it smallest subscription revenue dip (14 percent) in five years, AOL says – a two percent churn rate.

Net income rose sharply from $4.7 million to $21.1 million, thanks largely to this quarter’s absence of a last year’s amortisation charge.

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