AOL Time Warner: Buyers' Perspective

  • by January 17, 2001
The $106.3 billion marriage last Thursday of America Online Inc., the Internet services provider behemoth, and Time Warner, the world's largest multimedia giant, may have Wall Street analysts dancing a jig, but other media-watchers are taking a more cautious stance on how the union will impact the overall media landscape for media buyers and advertisers.

By all accounts, newly formed AOL Time Warner will need several months to effectively implement its long-range plan of action in terms of advertising strategies across its vast breadth of media properties, which includes print, cable, the Internet, record labels, and film studios. The company has created an in-house committee, called the Ad Council, which is comprised of representatives from each of its main businesses, to facilitate such synergistic advertising strategies across the brands, where it makes sense, analysts say.

Media buyers say the merged company's sizeable market share and the potential media convergence across its properties will be AOL Time Warner's greatest strategic tool, not its ability to raise rates. And although media advertising softening is projected for the first half of the year, AOL Time Warner's multiple revenue streams should help it offset any advertising slowdown.

Some fear a potential drawback of the deal is confusion, at least in the short-term, over which rep handles which business segment. The company also faces the difficult task of determining how its vast inventory will be managed, such as through a central office or discretely through the individual properties. There is also speculation that massive job cuts are in the works to streamline the company and eliminate overlapping.

However, an AOL Time Warner official says the company respects the relationships ad reps and media buyers develop and intends to maintain these relationships.

Once a plan is in place, however, others will likely view the AOL Time Warner mega-merger as a blueprint.

"It's definitely going to be business as usual for at least the next six months," says Christopher Todd, an analyst at Jupiter Research. "Long-range, AOL Time Warner is going to be leveraging some very compelling media offerings...that will redefine the way media is bought and sold. It's going to take the concept of cross-channel packages to a whole new level."

AOL Time Warner has not publicly stated its specific advertising game plan, although a source within the company says it has no plans to merge the sales forces at all. According to the high-ranking source, the company did an internal review and found, to its amazement, that only four of the top 100 advertisers for Time Warner, AOL and Time Inc. overlapped.

So, the question for AOL Time Warner becomes, considering its plethora of brands and properties, how does it deliver to its advertising clients even greater strategic offerings?

"Really, what we're looking to do is find 21st century advertising solutions for our advertising p

Next story loading loading..