Can AOL find a niche in business publishing?
AOL’s transformation as a content company is extending into the B2B space, as it rolls out three vertical business sites under its new AOL Industry unit. The new sites – covering the energy, government and defense sectors – will lean heavily on social integration and an old standby, display advertising, as AOL attempts to parlay its consumer publishing experience into B2B success.
“There’s a big white space in terms of catching up trade media to all the lessons that have been learned in digital media,” Jay Kirsch, vice president and general manager of AOL Industry, said in an interview.
Those lessons include social network integration. Visitors will be able to sign in with via their LinkedIn accounts, which will make it easier for professionals to connect and discuss the important issues that are driving their industry, Kirsch said.
“Business decisions are inherently social,” he explained. “Facebook Connect has been phenomenal for consumer products, but it’s not the right tool for this product. LinkedIn integration is better for showing the business relationships and how people are directly connected to the news.”
Additional LinkedIn integration is apparent on the first site to go live, AOL Energy. Article pages include links to the LinkedIn profiles of sources or companies that are cited in the content (image, right).
Advertisers will benefit from the LinkedIn integration as well, since they will be able to learn more about the professions, sectors and networks of logged-in site visitors, which will enhance their targeting efforts.
Focus on display advertising
AOL’s emphasis on traditional display advertising as the primary revenue driver for the new verticals is interesting, given that many trade publishers are aggressively expanding their portfolios in an effort to decrease their reliance on ad revenue. Marketing services – a hot button for trade publishers eyeing everything from custom content to database marketing – are not currently on AOL Industry’s radar. Kirsch said AOL’s vertical sites will be supported almost entirely by advertising for the first year, although the group will explore other potential revenue streams.
A risky play, perhaps, although some signs are pointing to a renaissance in online display advertising. Revenue for banners and display ads grew more than 23 percent in 2010 to $6.2 billion, according to the Internet Advertising Bureau. The IAB’s Sherrill Mane attributed that growth in part to the launch of new, innovative ad units and a greater emphasis by marketers on brand advertising in digital channels.
AOL’s Project Devil initiative has played a lead role in these newer display ad formats. In February, the IAB adopted AOL's 300-by-1050 Devil format as its new portrait ad unit standard. AOL says engagement with Project Devil ads is higher than traditional display advertising. Interaction rates with Devil ads have surpassed 10 percent and average about 1.9 times the industry rate, while time spent with each ad averages 47 seconds, or about 3.4 times the industry average, AOL said in its recent earnings report.
Project Devil ads don’t appear yet on AOL Energy, however. In fact, as of this writing, the only display advertising on the site is a house ad for the AOL Energy newsletter.
Despite Kirsch’s proclamation of a white space opportunity, experienced trade publishers are also experimenting with innovative ad models. Last year, for example, technology publisher IDG teamed up with Widgetbox (now known as Flite) to launch a “nanosite” ad unit that houses video, feeds, social media and other interactive content.
Whether this type of brand advertising has an upside for B2B publishers remains to be seen.
'A deeply engaging experience'
Project Devil is one example of the consumer publishing expertise that AOL hopes to tap for its business verticals. A second example is video; Kirsch said his group plans to fully leverage GoViral, the digital video service that AOL purchasedin January, for its business sites.
The sum total of these efforts will be “a deeply engaging experience with readers,” said Kirsch. The Energy site features a mix of original and curated content, event listings, video and podcasts. The sites will also feature contributed articles from outside experts – including potential advertisers.
“We have an edit team that is expert in the verticals they cover, but we also want to draw from other experts,” said Kirsch.
While this arrangement may not work in the consumer space, Kirsch believes it makes perfect sense for B2B publishing, in which the vendors are also experts in the subject matter.
“Budweiser does not add anything to a conversation about football, but the CEO of Siemens would add a lot to a discussion about the energy industry,” he said.
Siemens President and CEO Peter Loescher is, in fact, an early contributor to AOL Energy. Other expected contributors include Jonathan Silver from the U.S. Department of Energy, Thomas Kuhn from the Edison Electric Institute, and members of The American Council on Renewable Energy and The American Coal Council.
This is not a pay-to-play model like Forbes’ AdVoice program. All submissions will be vetted by the editorial team, Kirsch said.
In addition to the AOL Defense and Government sites, which the company’s press release said will launch “soon,” Kirsch said his group will consider other verticals as well, with a focus on sectors that are highly regulated, highly data intensive, or are going through a significant disruption.
Kirsch said the Industry sites will have their own editorial and sales staffs, while sharing development resources with AOL’s consumer group. He declined to comment on the size of the teams.