AOL’s attempt to become one of the world’s leading content-producing companies includes a big and underreported push to bring new efficiencies to the editorial process that its executives claim will let reporters and editors concentrate on making good content rather than just producing it for the Web.
With the company going public this week as a standalone entity worth an estimated $2.5 billion, a lot is riding on the initiatives. They were launched under CEO Tim Armstrong, who took the helm in April after heading sales at Google with previous stints in sales at Disney-related digital media properties.
At the heart of the new plan is a project called “Seed,” through which freelancers will be able to register and get hired without the HR processing that today can take up to two weeks, said Bill Wilson, president of AOL Media, who heads content initiatives.
The system will also allow for more automated assigning and payments, said Wilson, who I interviewed via phone and e-mail. I spoke with Armstrong before the new initiative was formally launched, and communicated with current and former employees, one of whom agreed to be quoted.
Wilson said AOL is also consolidating more than a dozen content management and production systems into one so reporters and editors can assign and choose stories, file and edit them, grab photos, link information, promote headlines and handle other editorial duties much more seamlessly than today.
AOL’s staff of some 500 reporters and editors will also have reams more data at their fingertips — from search queries and site link click-through information to consumer databases that show users’ preferences — to help come up with stories that might be of interest.
They’ll be aided by what they’re calling a “demand algorithm” that will help predict what content has a good chance of being popular. Wilson and advertising sales counterpart Jeff Levick insist, though, that decisions of what content to produce will be determined by humans, not machines.
And though the new moves have been characterized as a way to make advertiser-friendly content, both Wilson and Levick stressed that content not likely to attract advertisers will be made.
“It’s not about trying to monetize everything. It’s about engaging consumers,” said Levick, who responded to my questions through a spokesperson who emailed me his answers. Wilson added that users who come in for one story may click-through to something else that has a higher advertising value.
To help prove that they’re looking for quality, execs noted that AOL has nine Pulitzer Prize-winners on staff, seven baseball Hall of Fame voters and three Heisman Trophy voters covering sports, and such well-known names as Politics Daily editor-in-chief Melinda Henneberger and columnist Walter Shapiro.
Freelancers, who currently number about 3,500, will be paid a range of less than $100 to as much as $750, with possible bonuses for updates, or for additional traffic for stories writers submit on their own that editors accept, Wilson said.
A report in The Wall Street Journal on Nov. 30 was “wrong” in saying that the new system could “blur the lines between journalism and advertising” or implying the company might write “advertorial” content, Campbell said.
Wilson also said that while news of AOL’s 2,500 layoffs has made headlines, the overall headcount has remained stable as the company hires people who craft content in favor of those specializing in production.
Where AOL has been
To understand the initiative, it helps to put it in the context of where AOL has has been, transforming itself over the past decade from a company reliant on selling Web access and e-mail to one that sells high-profile ad space to leading brands, as well as low-priced Advertising.com ads placed largely in “remnant” advertising throughout the Web, and text link ads through its “Quigo” service.
It has also gone from a company that attracts traffic, and advertising, largely by packaging content such as text, photo slideshows and quizzes from third parties such as AP and Reuters, to a company that increasingly produces its own.
Some 80 percent of AOL’s content was licensed in the past, but original material now accounts for more than 80 percent, and that content attracts 70 million of approximately 98 million unique visitors every month, Wilson said. He noted that it also brings links and inbound traffic from sources such as the Drudge Report and The Huffington Post, which “we never would have received 12 months ago because we had commodity-based content.”
Much of that original material comes via one of AOL’s 80 or so blogs, many of which were acquired in 2005 from Jason Calacanis’ Weblogs, Inc. AOL also acquired Calacanis’ publishing platform, called Blogsmiths, a key piece of the technology AOL is transforming to handle the Seed initiative.
So while AOL has been producing original content since well before the Armstrong era, it has sometimes been lambasted as being fast, inexpensive and done purely to attract, say, young men with disposable income, while downplaying any affiliation with AOL.
AOL also continues to run such sites as Philanthropy Project and Good News Now that were, according to former AOL production manager Jonathan Meyers, launched purely to satisfy an advertiser’s request, if not allowing them to choose the content. AOL also has “robo-sites” that automatically assemble headlines and feeds, such as NewsRunner and Love.com.
The company’s executives said that as AOL produces more high-quality original journalism and attracts users, high-profile advertisers will come. Wilson pointed out that other financial benefits of producing content include the ability to sell and resell content, and also provide it on any platform it chooses, from mobile to e-readers to television set-top boxes — all of which it was prevented from doing when licensing others’ material.
To improve the user experience, Wilson said, Armstrong decreed that AOL remove ads from many of its pages. Levick would not say if this means AOL is forgoing revenue, nor would he disclose advertising rates.
But will it all work?
Though the news from AOL may be heartening for reporters and editors who have been facing a constant drumbeat of closures and layoffs at traditional news outlets, it’s anything but certain that the strategy will pay off. There may be increasing demand for quality journalism, but there are plenty of companies that I think make it, from The New York Times, CNN and Reuters to smaller, more nimble, and more cost-efficient operations, such as Talking Points Memo, Gothamist, GigaOM, Deadspin, and many many more.
Meyers pointed out that Armstrong didn’t bring a cadre of Google engineers to AOL, saying the flow of top talent in fact has been in the other direction. Making all the systems work could prove more of a challenge than is being let on.
There also may be a danger that reporters, looking for bonuses, will file stories more likely to attract traffic (and dollars), ones that editors mindful of the need to make a buck won’t be able to resist. Observers, including Poynter’s Rick Edmonds in the Journal piece, have sounded a cautionary if not outright critical tone in saying AOL was crossing a dangerous line in producing content to attract advertising.
Still, let’s be honest: It’s not as though AOL invented the model of providing journalism that will make advertisers happy. Would the auto or real estate sections exist in The New York Times or any other newspaper if not for the ability it gives them to attach advertising to those stories? Do you think there’d be as much health coverage on TV if not for pharmaceutical commercials?
By putting its strategy behind original content, AOL is putting a stake in the ground, while trying to bring efficiencies to content production that have been available for advertising for years. Even if the company doesn’t ultimately succeed as a business, making content and freelance management systems more efficient and easier to use has got to be smart.
And those of us who want to see quality human-produced journalism thrive and for technology to be an enabler certainly hope that a company that had been known more for content assembly and chasing ad revenue can transform itself into an audience-centric juggernaut producing journalism that appeals to wide audiences.
The main question for the newly public company’s survival is how long it can hold onto its newest strategic direction, and if the cash flows will move in a direction its stockholders think justifies their continued investment.
CORRECTION: An earlier version of this story incorrectly referred to an algorithm provided by Demand Media. AOL’s “demand algorithm” is its own.
