• by February 18, 2004

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.