AOL’s Armstrong: No Ad Demand Problem Here


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Despite the negative display revenue and ad revenues AOL (NYSE: AOL) reported this morning, CEO Tim Armstong quickly went to work during the Q1 earnings call to dispel the notion that things were still looking bleak at the company. Overall, he said that there are signs of an ad spending turnaround and that several verticals have ramped up their shift to digital and to AOL specifically. Armstrong pointed to automotive, consumer packaged goods, and finance as categories that have boosted online spending with the company by at least single digits. Throughout the call, Armstrong emphasized that the Q1 declines were directly attributed to the sales force realignment that began last year and continued into January.

“There is no demand problem among advertisers concerning AOL,” Armstrong said. “AOL ranks, on average, among the top three online places to advertise.” He was adamant that if it weren’t for the switching of assignments and the cuts, that AOL’s ad revenues wouldn’t have been down as much, noting that the sales group that was untouched by the reorg were up 100 percent year-over-year. “The reality is that when you do a reorg like this [80 percent of the sales force received new accounts], you disrupt the pipeline,” he said. “But we’re all shareholders and unless we made these changes, AOL would not be a place you would want to invest in for the long term. These changes are difficult, but they will better position the company.”

Armstrong also mentioned that despite the cuts, AOL has hired 50 new people to focus on agency and client outreach. Some of the companies AOL has been talking to are Haynes, 21st Century Insurance and Zip Car.

A rep for AOL elaborated on what the team, which was assembled in January and has a total of 60 dedicated staffers, will be doing: “Previously, AOL operated a very traditional, regional sales model and, in order to organize for the long term, we built a National Sales Team organized by industry categories and the top advertisers in each of those (approx 350 Advertisers)

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