AOL, Yahoo embrace big ads

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Media competitors AOL and Yahoo are embracing big, bold ads. The Wall Street Journal's Emily Steele today reports that AOL's larger, fancier formatted ads will be unveiled during the last week of September during Advertising Week. WSJ's The Diggits blog also obtained a Style guide (14 pages long) noting that the ads -- codenamed Project Devil -- "take up more room than even the long display ads currently on AOL" and "look basically like three ads stacked on top of each other." The move comes as AOL's CEO Tim Armstrong has been personally pursuing higher-end advertisers.

How, one wonders, did the Wall Street Journal ever acquire this Style Guide? AOL's loss is, one cannot fail to note, some of the best luck the embattled former subscriber-based company has run into in some time -- free advertising, ironically, for their new ad format.

The initial suite of AOL's options -- called "ad apps" --- include polling, photo galleries with links to "Buy Now" support, audio, couponing, video galleries, mapping and 3D rotation. Background elements will be uniformly white according to their own Style Rules and Conventions – Text and background elements. "(The) suite of Ad Apps will expand over time (v.2 and beyond)," says the Project Devil Specs and Style Guide. "AOL and partners will determine priorities and roadmap."

This is all a part of AOL's radical transformation plan to reposition itself as a leaner online content and advertising play. AOL's second quarter 2010 year-on-year ad revenue dropped 26%, to $297 million. International display ad sales fell 52 percent in that same period. Armstrong attributed the losses to the closing of numerous European offices in the beginning of the year as well as lower revenue from Bebo, which AOL sold at a loss in June.

Big, bold ads come months after AOL's arch nemesis Yahoo decided to add outsize display units to its own login page. "This new ad unit utilizes Yahoo's rich media solution to deliver a scalable, engaging, and custom consumer experience," said the Yahoo advertising blog in June. "Users are able to click on a link placed in the background art that takes them to a page with more information on the advertiser’s offering."

According to comScore, Yahoo had 97 million unique visitors in August, significantly down from 107 million visitors the same time last year.

Globally, however, Yahoo has seen a year-to-year drop in users even as competitors Windows Live Hotmail and Gmail have seen growth. The next version of Yahoo Mail is being rolled out to halt that overseas user decline as well as address the increasing competition from social networking and mobile devices. Fifty-three percent of Yahoo's U.S. page views, according to those  thus far in 2010, were from users checking their email accounts according to comScore. While Yahoo Mail is still top in total email page views in the U.S., it is in the process of a major revamp, codenamed (because all such projects have to have fancy codenames) "Minty."

Publishers may want to take a wait-and-see position regarding these ad units and not automatically follow the big boys. It remains to be seen what effect these in-your-face ads will have on the overall user experience, which is really the key here. Netizens are notoriously finicky about that experience, and user backlash is the last thing either of these companies need (for further recent reference -- see Digg). What price to gain advertisers if a publisher hemorrhages its audience in the process?

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