AOL Learns That You Can't Just Go 'Free, With Ads.' You Need To Give People Reasons To Visit

from the business-model-101 dept

It’s been a little over a year since AOL made the big decision to go free. It was about the only thing the company could do at the time. It’s subscriptions were dropping rapidly. It held little to differentiate itself from the many free services out there. It had failed to build a real broadband strategy for years. The problem, though, was that the decision to go free was made way too late and, most importantly, without much additional strategy behind it. It seemed like the strategy was basically just “if we go free, we’ll sell ads.” They left out the important middle step though: the company needed to actually give people a reason to visit and give advertisers a reason to buy ads. Without that step, it really isn’t surprising that the company is realizing its “free, with ads” strategy isn’t working as well as planned. On the same day that AOL officially bought another online ad company, it was revealed that the growth in ad revenue has been slowing, and it lost a big advertising partner. This is a good reminder, though, for other companies out there who are trying to figure out how to embrace “free” as a part of their business model. You can’t really neglect the rest of your business model.

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Companies: aol, time warner

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Comments on “AOL Learns That You Can't Just Go 'Free, With Ads.' You Need To Give People Reasons To Visit”

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jhozae says:

It's the memory of AOL that keeps people away

I remember how AOL software would try to take over your computer, and make it difficult to use competing software. I remember how a non-profit I volunteered for paid 2 yrs for an account no longer used because we couldn’t cancel it. And if you wanted sites outside AOL, you had to open Netscape or Internet Explorer. But I remember that if you complained about things in an AOL acceptable manner, they would give you 3 or 4 months free. Don’t think I paid for the last year I had them. Still wasn’t worth the hassle though.

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