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AOL Company’s Impressive Performance Essay

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Updated: Mar 3rd, 2021

Introduction

AOL Inc. is a New York City-based multinational that develops internet and website products. AOL products target individual consumers, publishers and other online advertisers. According to Shield and Calia, AOL’s advertising revenue increased in the third quarter (par. 1). This is due to the strong performance that the business has posted through third party sites. The growth in advertising revenue occurred despite the poor performance of its traditional internet connection division. This paper will evaluate the article by Shield and Calia on the revenue growth of AOL.

Summary of article

The impressive performance of AOL in its third quarter is attributed to various strategic decisions and processes. For example, the company has introduced a reliable online technology that enables customers to access its services. The target market includes online publishers engaged in ad sales. This is common with website companies such as Google Inc. The success witnessed by various publishers increased AOL’s revenue by 12% in the third quarter. The third quarter also saw an increase in global advertising revenues for different firms in partnership with AOL across the globe.

The third-party revenue increased to 44% due to the contribution of non-AOL sites such as Adapt.tv. AOL acquired Adapt.tv last year and this enhanced its advertising platform. Other organizations have conveniently used this platform to advertise their products. Such an integrated platform enhanced the financial performance of the company in the third quarter.

Under the leadership of Tim Armstrong, AOL has diversified from its traditional internet connection sector. Today, it is one of the leading digital-content platform providers in the country. This has contributed to the impressive performance of the company in the third quarter of the year. To increase its presence in the digital content market, AOL recently hired Dermot McCormack to improve the performance of its video and studio department. By developing strong video and studio contents, the company seeks to benefit from the heavy presence of youths online (Shields and Calia, par. 3).

According to various analysts polled by Thomson Reuters, AOL is projected to benefit from an increase in its share value. A 52 cent increase in share value will increase the company’s revenue to $624 million in the next quarter. According to the company’s CEO, marketing industry is currently witnessing a massive expansion that the company seeks to tap. This will provide new opportunities for ad selling and content marketing. To improve the performance of the company, products with a rich ads display must be developed for the market. According to Armstrong, AOL has an opportunity to invest in content marketing (Shields and Calia, par. 4).

For example, the recent successful live video developed for General Motors demonstrates that opportunities exist in content marketing. The focus of AOL in 2015 will shift towards large-scale ad program to improve its performance. Though implementing such a change will require more infrastructural development, the CEO believes that the company has an opportunity to grow in content marketing (Shields and Calia, par. 5).

Significance of article to marketing practices

AOL has made dramatic changes in its products in the past, moving from its traditional internet provider role to advertising services and content marketing. According to this article, the company has witnessed an increase in its revenue in the third quarter. The decision by the company to diversify indicates significant shifts and changes happening in the industry. Content developing and marketing for companies presents significant opportunities to AOL.

This article reports an increase in content marketing and the use of ad sites by various companies. According to this article, an increase in revenue from ads sales and content marketing will result to a shift in various marketing practices. The development of useful contents is the core of any marketing practice in modern businesses. Traditional marketing have been shut off with the introduction of the DVRs which are replacing television adverts (Shields and Calia, par. 4).

Traditional marketing continues to become obsolete as multinationals continue to adopt more accessible and cheap platforms. This explains the decision of AOL to diversify to content marketing and ad site sales. Major marketing organizations across the globe such as P&G and John Deere have adopted content marketing. Other small businesses across the United States and other countries have also implemented content marketing with varying levels of success (Shields and Calia, par. 4).

As highlighted by the level of success of AOL, marketers must change tact and develop market sensitive approaches. The market has witnessed significant changes and this has affected the benefits of various traditional approaches. With youths forming a large portion of the market, traditional advertising is no longer effective. To succeed, businesses must follow into the steps of AOL and develop web and internet based marketing platforms. These include the use of ad sales and content marketing which are all internet based. According to CEO of AOL, the company intends to invest in content marketing to improve its presence in the market. This demonstrates the need for emerging and existing companies to embrace modern advertising approaches.

Works Cited

Shields, Mike, and Calia, Michael. “AOL revenue jumps on Ad growth”. Wall Street Journal. 2014. Web.

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