A few months after being named COO of the Huffington Post Media Group (NYSE: AOL), Jon Brod’s responsibilities are being narrowed to focus on running Patch, the hyperlocal network CEO Tim Armstrong is betting more than $140 million on as a traffic and revenue growth engine.
Brod co-founded Patch with Armstrong and was CEO when it was acquired in 2009. His return to focusing primarily on Patch, rather than serving as the business lead for Arianna Huffington following the $315 million merger, is a sign both of Patch’s importance and the need for it to succeed. At the same time, Armstrong is taking over as the content group’s business head.
Prior to the merger, AOL’s content group was run by David Eun, who left as president of AOL Media and Studio when the role was split between Huffington as Editor-in-Chief and a business lead.
Following the Patch acquisition, Brod was put in charge of AOL Ventures, the company’s investment arm. His new role isn’t a complete reversal; in addition to Patch, Brod will also be managing Mapquest, which is a key project for AOL as it also ties into mobile. Armstrong has stressed the importance of mobile and local as a touchstone for just about everything AOL will be doing going forward. For years, Mapquest operated in the shadow of Google (NSDQ: GOOG) Maps — and the search giant sees that tool as an essential part of its new e-commerce focus.
While Patch has been struggling to make money and improve its content, Armstrong offered a set of stats designed to show that the hyperlocal network represents an attractive opportunity to bloggers. For example, “Adopting Huffington Post style blogging in the Patch platform allowed us to sign up 5,000 bloggers in 2 weeks,” Armstrong writes. Of course, getting them to stick around and produce quality posts is another thing. Two weeks ago, at the company’s Analyst Day event, Armstrong told the Wall St. banks that “certain” Patch sites would be profitable by the end of the year.
In a general sense, the changes reflect the ongoing consolidation of content sites under Arianna. Since Brod was the person who started Patch with so much promise, only to see the brand constantly battered in the press for not moving fast enough on making money — though everyone acknowledges how quickly it has expanded, as the hyperlocal network should have over 1,000 sites by the end of the year — it makes sense to put him on top of AOL’s local efforts.
But there are still questions about the management of the HuffPo Media Group. While Arianna is viewed as a dynamic figure who has driven HuffPo’s success with sheer force of will, she is not often well-regarded as a detailed manager. That’s where Brod came in. As HuffPo Media Group finishes up the integration process of a larger number of diverse brands, the removal of Brod as Arianna’s second in command leaves a large hole for now.
That’s not the only change that emerged today.
In a memo posted by AllThingsD (we’ve obtained it and added it below), Armstrong offered some details on plans to simplify the content side of the business. Some of that already has been done — moving AOL News to the HuffPo and merging the AOL Politics Daily channel with HuffPost Politics.
Armstrong’s Latest Memo
We spent the last week in France at the Cannes Lions Festival, which is a global meeting of the advertising community (the technology industry has CES and Cannes is becoming the “CES” of global advertising). After finishing Investor Day and the global company meeting two weeks ago, the trip to Cannes further underlined the opportunity we are starting to take advantage of – that content and brands are the next wave of the Internet.
Content, Brand Advertising, Video, and Local are going to be at the center of the web and mobile for the next decade and we have made bold moves to position AOL at the forefront of those areas. We have a powerful portfolio of assets as a company and by matching our people, brands, and marketplace-defining products, we will simply get stronger, better and faster.
We are going to further strengthen our content brand portfolio to put maximum leverage into key areas of growth. We are also investing in the leadership structure of the brands and the overall analytical framework we have as a company.
The brand portfolio simplification and investments we are announcing today come from our core strategy, the metrics of growth we see in the business today, and the expanding opportunities we see in the marketplace. Every brand metric was thoroughly reviewed and thoughtfully discussed to get to the list we are sharing with you today. There are a set of brands we will continue to run as stand-alone brands because they have built strong organic traffic, significant customer bases, and unique market positions. There is another set of brands that will gain usage, a larger customer base, and deeper content by becoming part of the Huffington Post platform.
We want to make this transition as simple and intuitive as possible for employees, consumers, and advertisers, so we’ve set up a link to the brand site to review the complete list of brands and USPs.
The AOL Huffington Post Media Group technology platform is the end result of a company wide effort combining the very best content, video, ad, and data technologies from the Blogsmith platform with the best technologies from Huffington Post platform-and we’ve been hard at work adding many new capabilities as well. This combined platform simply has no equal in the digital content space and features an innovative approach to coverage, with edit and tech teams working closely together, and a “hyper-efficient editor” model that enables editors and reporters to rapidly deploy all the tools available to create and disseminate stories. We have integrated in 5min video, AOL demand analytics, and AOL’s data platform deeply into the system, and we will soon be running all of the advertising through AOL’s ad platform. Editors are not silo-ed but empowered to quickly bring their stories to life – and to millions of readers. This leads to engagement on a massive scale, creating an editorial ecosystem with high-quality content, leading edge blogging, commenting, and social sharing capabilities that are easily scale-able and enable real-time speed and a more holistic approach to covering news and engaging audiences.
Here are some quick statistics on the benefits we are seeing in combining sets of brands and platforms:
• When we migrated AOL News to the HuffPost platform we saw significant increases in organic traffic with search entries per UV increasing 195% and social entries per UV up 142%.
• By combining Politics Daily with HuffPost Politics content, social interactions, which include HuffPost comments, FB comments, shares and re-shares, FB Likes, tweets, re-tweets, and email shares reached 3.3MM.
• Adopting Huffington Post style blogging in the Patch platform allowed us to sign up 5,000 bloggers in 2 weeks
The goals of the brand and platform investments are the following:
1. Grow traffic and grow revenue with high quality experiences for consumers and advertisers
2. Be the leader in content CMS and CMS for Ads (Devil + Social)
3. Simplify the business process and increase profitability in each vertical area
4. Scale video and International
5. Create a culture of speed and transparency on all fronts
In support of the brand investments, we are also making people investments. The current GM structure around the content brands will report to me and I have met with all the GM’s to discuss each vertical opportunity. Local will be broken out as a vertical and is a space where AOL is in a leadership position. Jon Brod will focus full-time on AOL’s local efforts, including Patch and Mapquest. Jon is the co-founder of Patch and has spent the past few months successfully integrating the Huffington Post and AOL media. AOL local has a lot of exciting products coming out this summer and we will be connecting many of those products to our larger business.
We are also announcing a new position that will have a positive impact across AOL – the formation of a Chief Analytics Officer and Project Management Organization (PMO). Tim Lemmon, currently working in Ned Brody’s Advertising.com Group, is being promoted to CAO, reporting directly to me, and will oversee and drive analytics and project management on a company-wide basis. Data and analytics are key to our success and we will continue to look for Tim to provide fact-based guidance and executional focus for all of AOL. Tim’s current AOL Analytics team including Pricing and Yield Management will continue to report to him.
I’ll be holding a working meeting today at 11am EDT with the Sales team to discuss the new brand structure, the HuffPost platform, and the supporting org structure. The meeting information is available on AOL Today and anyone is invited to dial in if you are interested in learning more. Go AOL! -TA