• by January 26, 2004

America Online concluded a months-long search for a media and creative agency by splitting duties for its estimated $60 million interactive account between Digitas and Omnicom Group's AtmosphereBBDO unit. The decision, which came on Friday, gives Digitas responsibility for contact strategy and online media buying and planning, and an unspecified creative role. Digitas has worked with AOL on customer retention and on creative for the Internet company's Netscape product line. Atmosphere, which has been AOL's online creative agency, will continue to work in that capacity as well as performing strategic duties.

"We're developing an online [media and creative] strategy that will allow us to play our full portfolio," said John Lane, AOL's VP-online marketing. "We really needed the leadership in contact strategy development and sophisticated online media buying, and we thought that Digitas was the ideal choice for that."

Asked whether Digitas will become the lead agency on the account, Lane said: "It's not a lead or subordinate situation. I'm keeping my options open to have a diversity of talent where that is feasible. The agencies will have clear lines of responsibility."

AOL began a review for an interactive agency in November, with at least a dozen shops receiving requests for proposal letters. Apart from Digitas and Atmosphere, Norwalk, Conn.-based Modem Media was also a finalist. Doner Direct, Southfield, Mich., the incumbent media buying and planning shop, didn't participate.

AOL has dramatically increased its budget for online media and creative as it attempts to stop a subscriber exodus to rival broadband services promoted by Microsoft's MSN and Yahoo!, as well as cable providers including its Time Warner Cable sibling, and telcos. Cut-rate broadband providers are also eating into AOL's global base of 33 million members, many of whom are dial-up, or narrowband, customers. Previously, AOL didn't do much online media buying apart from buys and barters made through Time Warner sibling sites. The hefty budget will help promote AOL 9.0 for broadband and a host of companion products, and will help to develop sharper acquisition messages.

AOL is trying to create a more sophisticated go-to-market strategy "that allows us to figure out in advance what situations we may encounter with certain prospects along the way," said Lane, adding that whether they're early in the purchase cycle or coming from AOL.com, "not every prospect is the same. It's not a one message fits all approach."

Meanwhile, AOL's estimated $300 million offline media review has narrowed to three finalists: Interpublic Group of Cos.' Initiative Media, the incumbent; Publicis Groupe's Starcom MediaVest Group; and Aegis Group's Carat.