Targeting Niche Audiences - AOL's New Branding Strategy‏

By Scott Buresh

AOL, once considered a pioneer in internet technology, has fallen on hard times over the years, unable to devise an effective branding strategy. A failed merger with Time-Warner, a non-focus on search while Google built an empire (the AOL search engine eventually began serving up Google results on its portal site), and declining dial-up business are all contributing factors to the ongoing difficulties of AOL and its search engine.

However, AOL seems to have a new branding strategy in mind for the AOL search engine, which would revamp its services and target specific niches. And while many "analysts" claim that it is already a failure before the results are in, it is too soon to tell how this will affect AOL and the search engine that bears its name. Personally, I think it's a smart play for the company - and something that bears watching. If the branding strategy is successful, another huge company may want to follow AOL's example.

You see, AOL understands that the AOL search engine and its other services are not a brand beloved by many. The AOL search engine and AOL itself are seen as somewhat ancient, old school, 56k, etc. Nightmare stories about its online services are not in short supply. I haven't done any specific studies on this, but in my circle of friends and business acquaintances, people consider an AOL subscriber a little behind the times.

The point is (in my opinion) that the "AOL brand" itself has decreasing value and may actually have negative value if the specific sites that it owns or has recently purchased are brought in under an umbrella branding strategy. These sites include those catering toward everything from country music fans to moms sharing photos to guys trying to pick up women. In some cases, the niche sites do not even display their affiliation with AOL or its search engine (or if they do, it is not featured very prominently).

The logic behind this branding strategy is clear. First of all, the AOL search engine and portal weren't attracting new visitors. Secondly, the AOL search engine and brand itself are not particularly hip or fresh. Third, and probably most importantly, specific portal sites attract specific types of users, which are usually highly targeted, prompting a potential for more ad revenue (in theory).

Basically, the AOL portal has stopped trying to be all things to all people. Google is able to pull off the "all things to all people" approach primarily because it doesn't have issues with a branding strategy yet - in fact, the new vertical searches that it adds under the Google "branding umbrella" are augmented by implied hipness and coolness. However, as AOL has discovered, hipness usually has a shelf life. If people began to see Google as the huge corporation that it is now, rather than the uber-cool underdog, the company may not be able to keep this record up. There have already been some cracks in its veneer, although by and large, the Google brand is still very positive and powerful.

There is another company much bigger than AOL that suffers from much of the same problems (and in some cases, worse problems) than AOL does but still wants to take on Google head to head. I refer, of course, to Microsoft.

In terms of a brand, Microsoft is almost universally disliked. The monopoly issue may be one thing. The fact that it is seen as 'old school' may be another. Gates and Ballmer don't exactly have reputations as "nice guys," like Sergei and Larry do (the fact that it seems natural to refer to the former two by their last names and the latter two by the first may help illustrate this point). And the list goes on.

The bottom line is that I have a hard time seeing MSN.com gaining the kind of traction that Google has, simply because the brand is less than sexy. This means, of course, that any additional vertical search options that MSN adds to its site are bound to be appreciated only by the dwindling few who already swear by the portal.

AOL has decided that its branding strategy for the AOL search engine and niche sites is not nearly as important as the amount of traffic and ad revenue that the site commands. This is not uncommon in the publishing industry, where many different publications on many different topics may be owned by one large (but largely silent) entity. Many of these offline publications have moved online and are beginning to monetize their diverse base of websites. AOL seems to have a similar model and branding strategy in mind for the AOL search engine and other niche sites.

If it works for AOL and its search engine, it could be the best possible branding strategy for Microsoft to follow. Lord knows Microsoft has the money. The company has already bought the ad networks that can service sites under its own new branding strategy. But if pride dictates that it keep everything under the MSN name or add a huge "brought to you by Microsoft" banner across the top of any popular online property that it decides to buy, MSN is, in my opinion, shooting itself in the foot.

I never said it was fair, but your brand and branding strategy can either be an asset, neutral, or a detriment. Microsoft has to realize that most people consider its brand to be in the neutral to detrimental range and that most people consider Google to be in the neutral to asset range (and that's probably being charitable). Microsoft should not try to compete with Google head to head without considering the disparities in the conceptions of their respective brands.