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AOL Planning Move to Ad-Supported Model
garzpacho writes "In recognition of the fact that its subscriber-based revenues continue to plummet, AOL is planning to shift to an ad-supported business model. AOL's subscriber base, which peaked at 30 million users, now has less than 19 million subscribers and is still dropping — over 800,000 subscribers dropped the service in this year's first quarter alone. In addition to seeing fewer AOL CDs, a shift to ad revenue also means some serious cuts in staff size, especially in the customer service and retention departments. From the article: 'Time Warner plans to announce a series of changes at AOL that analysts say will mark the end of the company's paid-subscriber model. The company will begin relying on advertising sales rather than monthly fees paid by customers, according to the Wall Street Journal. 'I don't know whether advertising will work, but my thinking is (the changes) are basically an acceptance of what is happening,' says Joseph Bonner, a media and telecommunications analyst at Argus Research. 'This is a reflection of reality, that they have to find some other source of revenue.''"
It seems to me that AOL is looking at the search engine model and trying to copy it. The only problem is that AOL has absolutely nothing to "draw" people in the way google does. It's kind of backwards actually. AOL continues to offer bloatware, horrible customer service, a poor product, and is now going to try adding advertisement into the deal to save itself. Google offers a top notch search engine with innovative product that makes people WANT to come, and now they are looking at offering broadband and becoming their own ISP..... AOL needs to fix it's business model and offer something compelling. If you're not drawing people advertisements won't do much.
I know a lot of companies do this but most companies aren't a network of people that like nothing more than to sit around all day bs'ing on the web.
How is it that one careless match can start a forest fire, but it takes a whole box to start a campfire?
Ad supported? It was the ads that made me quit AOL a few years ago. I got 60 spams per day in my AOL inbox, and there was no way to filter than other than to add a complete individual URL to the spam filter.
Where were you when the voynix came?
Am I alone in thinking that this is rather bad news? We're talking about a company with a ludicrously aggressive subscription-acquisition-and-retention policy, remember -- how much worse (i.e., ad-saturated) is the web going to become once AOL becomes a major platform for adversiting?
It's over AOL, the days of dialup are gone and people will eventually be using DSL or Cable provided by their locality. I for one am impressed that AOL even exists. I mean seriously, who uses AOL?
http://religiousfreaks.com/AOL blocked 0 spam e-mails today!
Badass Resumes
How deep does the banner advertising market go? I can't imagine that there is that much advertising-per-desktop to go around, with adwords already out there thriving. In simple supply/demand terms, instead of subscribers bolting, you will see cost per click plummet.
Dammit Otto, you have lupus.
The company will begin relying on advertising sales rather than monthly fees paid by customers
AOL doesn't exactly have a reputation for its great "content". What fans it does have, it has for making the internet accessible to complete technophobes.
So perhaps I misunderstand their use of the word "advertising", but what, exactly, do they plan to advertise with?
Somehow, I just can't see big money rolling in to put banners across the top of "my cat fluffy's homepage" or the literally millions of what amount to the web equivalent of "is this thing on?".
But good luck to 'em. As much as I hate TW, and have traditionally made fun of A-O-Lusers, it saddens me to see the last of the original great ISPs slowly dying off.
So, basically, people fed up with getting abused by their paltry customer service quit, and they lose money. To solve the problem, they shift to ad based revenue, cutting retention and service, pissing off even more people via the further reduced service who then quit, allowing them to shift to even more ad-based revenue.
It's brilliant I say! Brilliant! They've perfected some sort of perpetual money machine here!
It's safe to say that AOL has died, but the body doesn't know it yet. At one time it was a lot of people's portal to the Internet, especially in the pre-DSL days, but now I can't honestly understand why anyone keeps it. With on-demand Internet connections and browsers readily available, there's no need for this cheesy portal application, unless you're stuck using dial-up, but those numbers continue to fall rapidly.
AOL never saw the forest for the trees -- popularizing the Internet forced up connection speeds and access, and eventually they were outstripped by Yahoo, Google, and everyone else.People got tired of being kicked off and having to log back on, or paying too much on their phone bill because their "local" number was anything but. Once AOL had a large enough subscriber base, and once all those folks got a taste of the true Internet, they made demands that AOL couldn't meet, and so now they are soon to be relegated to the dustbin of history. There may come a time when people won't remember what the "A" in AIM stands for, and then AOL will be truly gone.
GetOuttaMySpace - The Anti-Social Network
Here's my prediction of what is going to happen:
Everybody who is dumb enough to use AOL keeps using it, but doesn't pay.
The true cheapskates of the world sign-up, but since they are cheapskates, the advertising really isn't going to work on them very well. Advertisers abandon AOL.
AOL ends up dying. Thank God.
I know, especially in this community, Im not the only one that finds advertisements everywhere quite invasive. Im not just talking about the internet either, branding and advertising is -everywhere-. With so many online vendors changing to/emphasizing ad-supported revenue streams, I have a feeling this is going to impact sales negatively in the long run...
It gets to a point where I see so much advertising, I dont even notice it. I know sub-conciously its supposed to be planting the seeds in my mind to buy things, but my spending habits have not changed other then necessities since I first started making money... I just see this method as a failure in the long run. I think the business of the future will be successful first due to customer service, and a very close second on quality of the product. Everyone is so connected now due to the internet, word of mouth advertising should become more and more viable as a primary advertisement source, and we can finally have our mental space back...
Looks like all those AOL customers have gone AWOL!
*ducks*
-Eric
SJW: Someone who has run out of real oppression, and has to fake it.
Not that I have ever used AOL, but unfortunately some family memebers I support do... and their number one complaint is that "my internet is so slow". So now they will get double slammed with ads, AOL's and whatever webpage they decide to look at. I'm sure they will be thrilled.
I have a better idea for AOL. Make your service something people actually want. Make it fast, make it simple, make it cheap, and most of all make it about the customer rather than your thinning wallets. I would have no problem suggesting AOL to anyone if AOL was all of these things. Hell I might even encourage people to pay a couple of bucks more a month if it meant fewer phone calls to me.
Unfortunately, most of the phone calls I get from AOL users are because of AOL. Throw more ads into the mix and I bet the number of people leaving increases rather than decreases. People aren't leaving AOL because of cost, it's because of better alternatives. If AOL had made their service better, treated their customers with some respect, and gave them what they needed people who wanted a simple way to get on the net would have flocked to them. Instead they gave them the opposite and are only gonna make it worse by adding ads to the mix of things they are doing wrong.
Sometimes the best solution is to stop wasting time looking for an easy solution.
I'm sorry, but that's what AOL is. I've had the displeasure of having to deal with them for YEARS.
I'll just be nice and ignore the fact that they bought and killed The Imagination Network, which was a blast.
Let's talk about their software. Their software that, to this day, takes like 30 seconds to start up, if it's feeling fast. Their software that often crashes after closing so when you think it's gone it's actually there sucking up 100% (happens almost daily on one of our computers). Let's talk about their integrated software suite that made since back when no one had a web browser but is now just an annoying piece of bloat-ware that should have been replaced 5 years ago minimum.
But they are going ad supported. You don't say. You'd think they were now based on using their software. In the last few years, they have gone to incredible lengths to cram ads on EVERY SINGLE SCREEN they display. Your mailbox? It has ads. Reading an e-mail? It has ads. Their welcome screen? Ads.
About a month ago, they started something new. When you exit AOL... an ad comes up. But it isn't just some little ad. It's as big as the welcome screen and it always seems to be for AOL.
But wait, it gets better.. that ad has a close button. And AOL doesn't exit until you press it. That means that choosing "exit" from the file menu DOESN'T EXIT AOL. This also seems to happen before you log off, so good luck if you don't have an unlimited plan for some reason and you forget about this.
I can only tell you from having to support my parents on AOL for the last 5 years or so (they've been members longer, it just wasn't so bad before) that AOL is a NIGHTMARE. It's amazingly slow. It crashes. If it gets screwed up (and it has) reinstalling often doesn't fix it. When you upgrade, it makes a new folder in Program Files and leaves the old version there, but deletes the shortcuts to it. Nothing like looking at someone's computer and seeing 5 copies of AOL. They continually add terrible software that only slows things down OUTSIDE AOL like their virus protection (we already that had), their firewall (WE ALREADY THAT HAD), and more. And there is something to be said for a program that keeps ALL the users downloaded files in some random directory by default. That was acceptable back in the Windows 3.1 days, but ever since Windows 95 those thins are supposed to be in My Documents. But instead, this are spread across the computer. Can't find a file? Did you open it in AOL? Then it isn't where it should be, it's in C:\Program Files\America Online 9.0 Security Slowdown Edition\Something\Or\Other. Also, what other e-mail client DELETES THE MESSAGES YOU'VE READ? You read a message, and when you log off it gets moved to "Read Meassages" or something like that. And the stuff in that folder, seems to get deleted. I don't know if it is the next time you log off, or after 1 week, or what. But if you don't specifically save it somewhere or keep choosing "Keep as new" (what my parents use) then it will go away FOREVER.
I've tried to switch my parents off. I've tried to get them to use IE or FireFox (instead of their constant problems in AOL). I've tried to move them over to GMail. I think I'm getting closer. I can't tell you how much easier my life would be without AOL.
Ah, AOL. You only outlived your usefulness about 7 years ago. All you've done since then is make things worse for everyone else. You were good at one point. It's telling that you've been hemmoraging subscribers for years, and the only way you managed to stay around during the boom (when EVERYONE was buying computers) was by generating 0.5% of all trash in the US with those stupid CDs that were put in EVERY MAGAZINE PRINTED.
Oh, yeah, then there is the Time Warner merger. That was a stroke of genius, huh.
Anyway, the point of this whole rambling anti-AOL post was that AOL already puts ads everywhere. Either their are raking in the cash and don't need the subscriber fees, or they are going to be in trouble when they do this because there is nowhere else to put ads except video ads in the background of the AOL window.
Comment forecast: Bits of genius surrounded by a sea of mediocrity.
Now how are they going to reach their goal?
Due to plummeting sales Mcdonalds announced plans to add dirt to their menu.
It's true no man is an island, but if you take a bunch of dead guys and tie 'em together, they make a good raft.
Who wouldn't want to advertise to the gullible?
"Install our free screensaver and it will speed up your Internet tubes 200%!!!"
Interested in a Flash-based MAME front end? Visit mame.danzbb.com
They still run on telephone modem due to restrictions imposed by the FTC from the TW/AOL merger - AOL cannot use TW's cable resources unless TW opens their pipes to competitors (which they have refused to do).
No geek of any stature would even think of subscribing to AOL and there is a uncomplimentory generalization of AOL members when they post to a forum.
AOL's solution to the spam problem is a whitelist which you have to pay a fee to send mail to.
If you send an email to an AOL account that is dead, you don't get a bounce so you have no feedback if your friend received it. Over time people stop bothering to email to any AOL account.
There are better alternatives to AIM and it has no place in the office. TW tried to make AIM the corporate messaging standard and it failed miserably.
AOL is on the blacklist at corporation IT departments. AOL software takes over your PC and requires a complete reinstall to remove it, which is not a favorite pasttime of IT.
AOL does everything possible to keep their members in their "walled garden" - you cannot even change the home page in the AOL browser, it is fixed at AOL dot com.
There is a growing backlash against aggressive mass marketing and people are getting tired of AOL junk mail CDs landing in their mailbox.
AOL goes to great lengths to prevent members from unsubscribing. Frustrated customers will tell all there friends to stay away from AOL. That's not how you build loyalty.
Someone please tell me how a shift to advertising revenue model is going to solve all this.
Eternity: will that be smoking, or non-smoking? I Corinthians 6:9-10
"planning to shift to an ad-supported business model"
Considering the amount of ads paid-subscribers endure, I'd say it's been effectively "ad-supported" for a decade now. At least, from an end-user perspective there will likely be no obvious change in AOL's appearance/presentation.
Unless they plan to replace what little remaining unique content they have with ads . . .
Does this mean that they won't let you cancel AOL unless you buy from an advertiser?
I always wonder myself, why people keep AOL. But then I look at a number of my customers who still use it.... In one case, it's a gradeschool teacher who is barely computer-literate, but expected to have her own email address in this day and age. She does the vast majority of her emailing on her Treo phone that a Sprint rep. informed her about and showed her how to use - and AOL actually is supported in the "Versamail" application included with the phone. Her worst nightmare would be having to switch to something new, and explain to everyone she knows what her new email address is. Her laptop at home has its start page set to AOL, and she knows just enough to sign in on that page and get to her stuff, double-click to view photos and videos that were too big to get on her phone, and so forth.
In another case, it's an older, retired couple. AOL came with their nearly 10-year old Compaq Presario PC that they still use with Windows '98SE. That's what they started with, and so they still use it. $15 a month or whatever is a small price to pay to stick with something familiar and to keep their same email address. (They're still using dial-up too. Just can't imagine a need to pay for anything faster....)
But ultimately, yeah - AOL is living on their (now dwindling) past success. Their customer-base is, by and large, the long-time customers who resist change and are scared of learning something new.
Dwindling user base? Here's the cure.
Flood them with mandatory advertising through your connection client. I'm sure that lots of modem using people are going to be double-plus happy waiting all that extra time downloading megabytes of extra rich shockwave advertising content at 56k, and then wading through it all just to get their email. Freaking brilliant.
Weaselmancer
rediculous.
They will switch you to the free plan now. I have a number of people for whom I manage their "internets!@#@@!!" and have finally gotten around to getting them all comfortable with gmail. I've had them in the "walled garden" for a while (14.95 a month AOL over Broadban plan) -- when I called to cancel for each one of them, AOL offered the same "we'll give you the service free" shtick. So if you're still using AOL, might as well take advantage now. (No clue what happens when the program is discontinued)
When in doubt, parenthesize. At the very least it will let some poor schmuck bounce on the % key in vi. (Larry Wall)
Comment removed based on user account deletion
There's no way we're going to keep uncle Homer and aunt Ginny off the web, and no real reason to want to. I can't remember the last time a search engine returned a page of someone's blurry photos of their cat. What we need is a way for them to access the web without our help! AOL used to provide that, and could again, if they'd get their heads out of their assets.
Sure, they've lost a ton of subscribers, but their membership is still equal to the populations of the five largest US cities, combined. Who uses AOL? You're kidding, right? Stop playing with your own ROOT long enough to get a clue about your neighbors. Everyone has DSL or Cable? Dream on. There are still plenty of people who don't have access to either, and plenty more who can't or won't spend that much on internet access. That $40 or $50 a month may be nothing to a highly paid techie, but it's a ridiculous chunk of money for someone scraping by on average pay when they can get 90% of the functionality for 40% off the cost. Dialup access is essentially free for most people, aside from the ISP charges.
I've recently had a real-world refresher course in what it's like to deal with dialup and dialup providers and, trust me, as bad as AOL may be, they're still better than the alternatives. Ever called an ISP's tech support and gotten connected to Bubba, whose six kids are all screaming over the blaring TV in the background, while he thumbs through the manual trying to find you an answer? I have. Apparently telecommuting has reached the sticks, even if broadband hasn't. Compared to that, AOL's support is a dream come true.
What AOL really needs to do is not pack more ads into less screen real estate, but get back to their roots. They dominated the ISP business by making it simple to connect, period. The content was always crap. Chatrooms have been supplanted by IMs. No one needs their guidance to find what they're looking for; all they need is Google.
The anti-virus and firewall apps are actually a good idea for the technophobes out there, who otherwise would probably be totally unprotected, but should definitely be optional. (I thought they were, but I could be wrong.) But they should dump the rest of the crap, and just do what they used to do best; make connecting simple and non-threatening for those who just want to turn it on, like a TV, and not have to worry about how it works.
They're not losing customers because of the content. They're losing them because they've lost sight of who their customer base is.
Yes, because nothing helps keep a customer more then poor customer service and a lack of people trained to keep the customers. Then again, I do remember their tactics "Oh stay, here let us give you 6 months free." Six months later "Oh stay, here let us give you 6 months free." Followed by someone saying "I noticed on january you accessed this much, and on February that much" - which really makes me you know happy.
AOL just has a rep, and not a great rep. Nobody wants their crappy interface anymore which is bloatware.
I mod down so you can mod up. Your welcome.
I could get fired for this but here goes:
I'm one of those evil AOL "retention" agents except I'm not an idiot like the guy in the recording you all heard a few weeks ago. It is astounding how things have changed here at the AOL call center since the incident with the cancellation call recording being on the Today Show. A few weeks ago they would fire you for not hammering the hell out of these people calling to cancel. They expected us to "save" every single caller and lying was acceptible and encouraged (as long as the lie cheated the customer and not AOL). Now they fire you for making more than one very polite saves attempt or being the slightest bit rude to the caller. Call volume is way down and rumors are rampant that the center will be closed. The management assholes in this place who have been running the money-machine scam for years have definitely had the smugness wiped off their faces.
Having said all that, if you know someone like your grandmother or your kid sister who likes AOL and wants to keep it here's how to get it free over broadband or for $9.95/month unlimited dialup - Just call and request to cancel. Just say they you've gone to broadband and you want to cancel and they will give you free version. If you want the dialup version request to cancel giving the reason that it's too expensive and you want to go to a low cost provider. They will offer you $9.95 unlimited dialup no commitment. But you have to say you want to cancel or you won't be offered these deals.
Tell anyone thinking of tying AOL to beware of the "Risk Free Trial" disks. Risk Free Trial really means money back guarantee (it's not the slightest bit clear on the packaging) and the payment method will be hit for $25.90 on the day after creating the account. These risk free CDs are making checking accounts go overdrawn by the tens of thousands because the dipshits running them don't have an extra $25.90 to cover the unexpected charge. The typical AOL customer nowdays is either old or poor or an immigrant and most of them don't have much money. If you want to make a AOL account call AOL and make them give you a free trial and then cancel it to get the free broadband account or the $9.95 dialup.