Ready or not, America Online is gearing up its marketing machine again, after last December's advertising blitz landed it more customers than the service provider could handle. Leaning on a new ad agency, Gotham Inc., AOL plans to air a fresh round of TV commercials beginning in May as part of its renewed effort to grow its 8 million-strong customer base.
The new ads illustrate a dilemma for AOL CEO Steve Case. "He needs to grow to keep the stock price up ... without frustrating users," said Kathleen Wiegner, contributor to ComputerLetter, which tracks the computer industry.
Subscribers got a taste of the nasty side effects of rapid growth when thousands of new users flooded the network following the so-called "Jetsons" TV campaign launched late last year. The ads, created by TBWA Chiat/Day, featured music from the cartoon space-family series. AOL is mum on its new campaign, other than to say it has signed on Gotham as the creative force, although AOL will continue to work with TBWA Chiat/Day on other projects.
The message will have to be craftily constructed to avoid alienating subscribers already frustrated by inaccessible email, additional charges for dialing purportedly toll-free access numbers, and the still-relentless busy signals.
"It's a bit of a gamble," said Tim Bajarin, president of Creative Strategies, "but proactive marketing is necessary.... I fully believe that Microsoft is going to make a push with MSN and the Internet is going into the space that AOL has had."
The leviathan service provider isn't going to be edged out without a fight. But it has yet to complete its pledge of a US$350 million investment in the network after users were turned away by busy modems following the rush to sign up during the last ad campaign. AOL installed 70,000 modems between January and March and plans to add an additional 80,000 by June, to bring the total to 350,000.
However, AOL said that the new advertising effort won't result in network traffic jams that irritate users. "We're taking a different approach to marketing," said spokeswoman Trish Primrose. "It will be a very slow ramping up that will allow us to measure the effect of incremental increases on our system."
