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"We’re going to be that second choice and that’s a really good place for us to be" - Bob Lord, CEO of AOL Network

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By Stephen Lepitak, -

September 27, 2013 | 10 min read

It's a month since Bob Lord, former CEO of Publicis-owned digital firm Razorfish and right-hand man to Maurice Levy, took up his post as CEO of AOL Network, at the same time as a partnership deal was agreed with his former employers.

The Drum meets with Lord in a rare quiet room at Cologne's Messe conference centre, where he is one if around 25,000 attending the world's largest tech conference, Dmexco. Prior to today, he has had a brief bedding-in period of 25 days so far and is open enough to state that he still has a lot to get to grips with, but is in good spirits and clearly enjoying a new lease of life.

At this stage, pretty much everyone continues to ask why he made the surprise move to AOL Networks, so he is prepared to reel off many factors, not least in highlighting the scale of the business he has taken on. "The company now owns 98 per cent of the tech stack, meaning that it is a genuine competitor to Google, and its globalisation is opening up so many opportunities for AOL as it grows its reputation as a technology company, as well as a media owner," is one if his insights.

"When I looked at what Tim [Armstrong, CEO of AOL] had assembled...he’s got creative content assets, and he’s got technology. If someone is going to defect to come to a company to help them solve marketing problems, they’re going to go to a company that understands convergence because it is going to be more difficult for them to replicate it themselves. You want to stay close to your core business. Mercedes wants to make the best cars in the world. They don’t want to have to manage technology, media and creativity to be marketers. They can outsource that or have options to go to and AOL should be the first company that brings that convergence to them."

As to the company's ability to challenge the likes of Google in the tech space, he states that he is confident about the opportunity to offer an expanded service to advertisers: "It feels really comfortable and energising for the technology team. We’re going to win. There’s going to be a second choice to the big guys who are out there, and I believe that we’re going to be that second choice and that’s a really good place for us to be."

Lord continues by stating his belief that technology will inevitably grow its influence over marketing going forward; "We have data that shows that 55 per cent effectiveness of a dollar drips away by going through the echosystem, and shame on us for not allowing that dollar to be more efficient. When you go to some of these companies, what you find a lot of the time when you pull back the curtains are lots of arms and legs and excel spreadsheets to get to the results, and that stuff should just be routinised. There’s no reason why machines can’t do that logic and can do that better."

Lord is vocal on the power of the data held by AOL, stating that he has no fear of Big Data. "We’ve got this huge ability to segment audiences, which we didn’t have before," he states. "If you’re a mathematics major, you always think about the pattern that you want to discover. Big data allows you to figure out the patterns. That whole world has upended."

One problem he believes that the industry faces is one of 'unlimited publisher supply', and he is currently on a journey of discovering within AOL Network to learn what it has to offer the marketplace and what it's customers think and need.

He also claims that chief marketing officers are confused as to their needs at present and who to look to in order to service them when it comes to technological solutions in such a widely fragmented industry.

"They get lots of pop up companies come and talk to them about this one little thing that they're fixing, which sounds really great and cool, they’re plugins. What I’m really excited about, and what is a huge value proposition for us to push out is that you can consider AOL as an open echnosystem that you can plug in all of its features," he explains. "When you start thinking about AOL in that way, we have to plan all our strategy and we have to think about the components of what we need to build, what we need to buy and what do we need to partner? With partnering, we’ve done such a good job when you think about the marketplace with publishers, how we’ve partnered with publishers in interesting ways in terms of supply, but what we haven’t really done as well with is partnering with technology companies to enable our platform in a unique and different way."

Asked how that issue can be solved, he explains that he believes it is a matter of data organisation, which products such as Adap.TV, bought earlier this year by the company, can aid. However, he also believes in allowing all technology to work together, whether it be owned by AOL or not.

"The most important piece that I’m really happy about is the guts of the matching process that is effective. If that’s broken and you don’t learn from your simulations and you don’t learn from the current network and its matching process and how effective it is, which Ad.com brought to the table, Marketplace and Ad Tech brings to the table - that’s the core guts. Then it’s all just about all the stuff we’re putting around it. That’s my validation of that because that’s not broken. I don’t see that as broken. We beat out other people when we compete with them."

The conversation moves to his views of programmatic buying, another area of evolution that marketers are struggling to come to terms with. "Because it’s programmatic it’s all RTB. People misunderstand that," he says, comparing the sector to that if financial services automation.

"When we start saying that we’re going to automatically match audiences with publishers and premium content, that doesn’t mean that the premium content price is going to be eroded. I believe that because our audience segments will get tighter, that an advertiser will pay more for that premium content and the publisher can set a floor price. The market dictates what the floor is through the stock price," he says, explaining that there is still that misconception in the marketplace around programmatic buying.

"AOL is in a position right now to put up its premium content in programmatic fashion and ensure that the marketplace runs the way that it is intended to run," he adds, before adding his belief that it will help improve efficient TV spend.

"The challenge is, until a lot of the RTB stuff comes online, where does the volume go, because people are looking to spend that money. Where are they going to spend it? There’s lots to spend it on TV or on big tent pole events, and people are used to that. If you’re a direct response marketer, you’re going to be the one to shift first to shift. If a credit card company wants me to make more credit cards as applications come through, you can track that online. We just don’t carry it all the way through the front, which we can do."

Another product he discusses, launched just the day before this meeting, is Marketplace, which Lord explains offer the ability to create a display mobile video marketplace, which will be rolled out across a number of countries.

"It gives publishers alternatives to go to than what they have now and large brands are asking us to look at private marketplaces also on the platform. There’s a couple of businesses that you start to think about and you start to think about different pricing models because people are going to start to value those toolsets differently. We at AOL Networks, need to explore all of those different models."

Lord's departure from Publicis was weeks prior to the announcement over the largest advertising deal in history, with the Group's intention to merge with Omnicom. He claims to have known nothing of he deal, alongside pretty much the rest of the world outside of a handful of people.

"I feel really good about the idea that there is going to be more consolidation in this space and Maurice is leading that effort. He has got a very clear view around data and data consolidation and bringing value to advertisers around that and the combination around Omnicom will help that out... I believe that this is a big step forward. Both of them have bought digital assets. They have a lot of smart people in there. As the world gets more complex, if a company like AOL can make the mundane tasks of marketing more efficient, I free up more dollars for a marketer to spend with a PublicisOmnicom Group (POG) because they have to become more creative in the advertising that they do... I see us as playing a valuable role in the consolidation play that they are going after because we are going to offer them an efficiency at scale to take the mundane called the Matching Process."

As to what services AOL Network can provide a group like POG, he believes it is in the video, mobile and display marketplace that they will seek aid, however he admits to disliking the distinction between the devices.

"I want to target an audience on whatever device, we can do that efficiently for an POG, then they are going to want to do it efficiently so they can free up dollars for more money into creativity, which is really where they want to be. That is their core strength if you look at Leo Burnett or Saatchi & Saatchi or BBH. Their strength is in ideas, owning brand promise and owning what it’s about."

Creativity is the final topic of discussion as the conversation draws to a close, discussing Tim Armstrong's focus on Life Advertising, a strategy that is being driven more by AOL Brand CEO Susan Lyne, although with Lord's involvement, who worries of too much focus on technology still, having written a book on digital convergence.

"That’s the one danger, that technology will overtake the human experience, and that’s why it’s smart for Tim to over index the human experience because you can’t root that out. The view that machines will take over I think is wrong," he concludes.

And so with the first month out of the way, it sounds as though Lord has more than enough to think about during his second month, and the many more ahead at AOL Network.

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