Interpublic Group of Cos.' Initiative Media managed to hold onto America Online's offline media account--estimated at more than $200 million--after a review process that began in November, AOL confirmed Tuesday. Initiative, the incumbent, competed against Aegis Group's Carat for the account. Publicis Groupe's Starcom bowed out of the review on Feb. 6, citing conflicts with its Disney business. Initiative will handle all media buying, planning, and strategy for Time Warner's AOL. "We are very proud of the partnership we have with Time Warner. We have been and continue to be the agency for [Time Warner's] New Line, and we value that relationship. We went into the [AOL] pitch and gave it absolutely everything we had," said David Verklin, CEO-Carat, who was disappointed after losing the closely watched review. "We give a lot of credit to Initiative, because the track record for an incumbent in a mandated pitch is not very good. It's like 10-to-one. So, kudos to Alec Gerster and his team." Initiative executives were not available for comment, but the media agency decision coincided with a shakeup in the brand management ranks at AOL--Len Short, AOL's flamboyant executive-VP of brand management, is out, the company confirmed. Short will continue to work for AOL on strategic projects, according to a spokeswoman. Reached by phone, Short referred calls to AOL officials. Short's duties have been parsed to other marketing executives at AOL. Richard Taylor, who handles agency relationships, will now be responsible for brand advertising, promotions, media, and agency relationships as senior-VP, brand advertising and promotions. Derek Koenig, VP-advertising, will now report to Taylor. Mark Greatrex, who worked on brand architecture, is now executive-VP, marketing and brand development. Russ Natoce, senior-VP of brand management, will report to Greatrex. Short, who came to AOL from E*Trade a little more than a year ago, was known as a cowboy who marched to his own drummer. During his tenure at AOL he helped shore up the brand, working toward a unified look and feel for its advertising. Short also called several reviews, and was known for keeping his creative options wide open. He retained smaller agencies for projects and consulting. One of his first moves was to part company with Interpublic's Gotham; Omnicom Group's BBDO, New York became AOL's agency of record for AOL 9.0, along with its sibling atmosphereBBDO. Both continue to work on AOL for broadband products and services; BBDO had no comment on Short's departure. Short appointed Wieden & Kennedy, Portland, Ore., as AOL's agency for the corporate brand, then decided it would work on AOL TopSpeed (the latest commercials ran during the Super Bowl), leaving corporate branding work for later this year. A recently concluded interactive media review tapped Digitas, which had already been working with AOL, and retained atmosphereBBDO. That review was led by John Lane, with input from Short. In an internal memo to employees, Joe Redling, AOL's chief marketing officer and Short's boss, said: "Len Short, who has portrayed extraordinary energy and skill in raising the bar on AOL's creative work and in laying the foundation for the revival of our brand, will be stepping back from his day- to-day operational responsibilities and oversight of AOL's advertising agency efforts." Some AOL employees who worked with Short were apparently frustrated by his diffuse management style and turn-on-a-dime tactics, according to one source close to the matter. One example of those tactics: Short allegedly failed to preview final cuts of AOL's Super Bowl commercials created by Wieden & Kennedy, for key executives, according to an AOL employee. However, AOL said that Short is not being blamed for the Super Bowl halftime show flap. -- Joe Mandese contributed to this story.
Martin Nisenholtz, CEO of the New York Times Co.'s New York Times Digital, oversees all new media ventures at the Times' digital unit, and founded the Online Publishers Association in June 2001. Prior to his career at the Times, he worked at Ogilvy & Mather Worldwide from 1983 to 1994, where he created the Interactive Marketing Group and led client-focused interactive initiatives. Earlier in his career, he focused on emerging interactive and telecommunications issues as an academic and research scientist. At the Times, Nisenholtz presides over an online publishing powerhouse and innovator--the New York Times Co. reported that its digital unit achieved $25 million in revenues for fourth-quarter 2003, up from $19.7 million for the same period the previous year. MediaDailyNews' Tobi Elkin sat down with Nisenholtz recently to hear his views on where interactive media and advertising is headed for the first of a two-part series. MediaDailyNews: What is the state of the industry? Martin Nisenholtz: I think the state of the industry is strong, and it's a little bit scary in a way, because the cycles that we've been through over the past six or seven years have been so dramatic. I think everybody understands that the cycle that ran from mid-'98 until mid-2000 was way overplayed. And then the cycle that began in early 2001 and which catalyzed the founding of the [Online Publishers Association] in June was similarly overplayed. In other words, we went from a situation of total irrational exuberance to despair within a period of six months--and during that period, from a consumer perspective, we continue to see increasing consumer engagement. At least in terms of the Times Web sites, and from an industry perspective, robust growth overall. And yet the opinion of the folks who were planning and buying the advertising went from holy grail to unworkable literally overnight. MDN: What's changed in the last year or so? Nisenholtz: I think, in part, because of some of the efforts by the trade associations and because of the efforts of all of our sales forces. Or there just simply is a lot more awareness about the Internet and how it's used in major media companies on the buy side and client companies. The marketplace has said we understand that this is real and that people are actually using these things in their lives. The ethnography research that the OPA came out with early in the year was really indicative at a household level of how people are integrating computing and the Internet into their lives. Once marketers and agencies begin to see that, and once the folks who work in those environments do it themselves ... and I've always felt that's really a key. That when people who are spending the money are using the medium, it becomes much, much more tangible. In addition, you've had a dramatic increase in accountability, so marketers are beginning to see that the Internet has begun to--and will fulfill--its promise of becoming a very accountable medium, and therefore is deserving of some media spend. We want to make sure as we go forward that the industry is delivering on its promises, and I think there's still plenty of running room. I think that the marketing community is still underspending by a very significant margin, given the numbers of users out there and given the engagement these users have with our medium. I don't think we're anything close to being back where we were during the bubble. I think we're in a sense just beginning to fulfill the promise that this medium has. You asked me about the state of the medium. I think to punctuate this, what seems to me to be [the] most important thing is that the perception of the medium and its effects are realized by the folks who hold the purse strings. Look, there is tremendous inertia surrounding existing ways of doing business. That has always been true, and it will always be true. Business models that support existing ways of doing business are highly defensible in most cases, but now I think what we're beginning to see are significant numbers of people saying 'look at the way younger people in particular are taking up broadband and using it in their lives.' We really need to understand that much more carefully or else as marketers, we're cutting off a major channel to the consumer. MDN: Are marketers taking this group seriously? Nisenholtz: If marketers aren't planning principally against that base and focused on finding out about that base, I think they're making a mistake. That's what's real today. Is interactive television real? Yes, it's real, but it's marginal. Are wireless services real? Yes, they're real, but they're still very nascent in terms of their ability to deliver advertising messages. Marketers should look at everything. But there is a tendency sometimes in our medium for marketers to look at the next big thing. The current thing is the World Wide Web on a PC. There are tens of millions of people using the Web on a PC. That's what's real and that's where most of the attention should be spent. Just my view. MDN: What's the disconnect within agencies about interactive media? Some are more progressive than others. What is the agency conundrum? Nisenholtz: I don't know that there is an agency conundrum that we can talk about as a general conundrum. I'm a realist, I've been around for a long time. I really do believe that based on the numbers and based on what I read, there is a growing recognition of the Web as a significant force in our society, and as a significant channel of marketing for a variety of purposes from branding to direct response. I can't sit here and tell you that agency 'X' or agency 'Y' are further ahead in understanding that. I literally can't do that because I don't have that kind of reach into every agency in the United States. MDN: Where do you go once awareness is raised and marketers start to ante up a little bit more money? Nisenholtz: Well, you just answered your own question. It's a little bit more. Where you go from here is to continue to try to educate that community about the benefits of this medium so that more than a little bit is allocated.
When the Nielsen Norman Group took its first look at email newsletters two years ago, the research firm found that users were having difficulty distinguishing between asked-for missives and spam. The result, predictably, was that many newsletters met an ignoble fate at the bottom of the recycle bin, while the marketers who sponsored them gnashed their teeth in frustration about inbox clutter. With Tuesday's debut of "Email Newsletter Usability, 2nd Edition," however, the company found a vastly changed e-marketing landscape. The good: consumers are getting better at distinguishing between spam and legit opt-in newsletters, most of which have forged a strong emotional bond with their recipients. The bad: many newsletters are still arriving too often and running too long, compromising their effectiveness and discoloring consumers' opinions of the sender. "It's still stressful for most people to deal with their inbox," says NNG principal Jakob Nielsen. "But the best newsletters have a connection that overcomes that problem. It's still a great relationship-building medium." According to Nielsen, the major difference between the newsletter landscape two years ago and today is a relative increase in consumer sophistication. Then, newsletter recipients didn't differentiate between commercial and non- commercial email, and were eager to sign up for joke-of-the-day notes and anything else they could get their hands on. NNG predicted that newsletters faced somewhat of a tenuous future, primarily because the firm anticipated they would be buried by the oncoming avalanche of commercial e-mailings. Now, with consumers getting a better grip on the spam problem (with a healthy assist from their Internet Service Providers), they have started to differentiate between "need to know" messages and "nice to know" ones. So while the aforementioned joke-of-the-day deliveries may be extinct relatively soon, newsletters viewed as essential by recipients are thriving. "The ones that make users think 'right now, I'm getting value out of this' have created a connection too strong to be broken by email overload," Nielsen says. According to the study, the three essential ingredients for any newsletter are frequency, length (alternately dubbed by Nielsen as "scanability"), and convenience. And while this isn't exactly top-of-the-fold news to any savvy e-marketer, Nielsen remains amazed by the number of marketers who risk consumer wrath by transmitting densely packed missives on an almost daily basis. "Layout and writing style are so important," he explains. "Anything that makes the consumer feel like reading it is going to be work will get deferred. The predominant behavior for newsletters is skimming," Translation: keep it short and clean, or risk having your marketing messages consigned to inbox purgatory. The study also found that many newsletter senders commit a potentially fatal mistake in making it difficult for recipients to unsubscribe. Although there's a school of thought among marketing managers that they shouldn't let consumers out of their clutches without a fight, Nielsen says this tactic engenders considerable resentment. "Newsletters are a relationship-based medium," he explains. "If [a newsletter] starts to annoy me, every time it arrives I'm reminded how much I hate that company." Along these lines, the study found that consumers have found a way of dealing with those newsletters that make them jump through hoops to unsubscribe: reporting them to their ISPs as spam. "That's basically death on the Internet nowadays," Nielsen notes. For the study, Nielsen Norman asked consumers in 12 U.S. states as well as Australia, Hong Kong, Japan, Sweden, and the U.K. to examine 101 email newsletters. It was conducted over a period of four weeks, and used a diary reporting methodology.