Building the world's 'most important media company': AOL's UK chief Hamish Nicklin talks ad blocking, content marketing & his plans for the future
Earlier this year, AOL brought in Google veteran Hamish Nicklin to lead and reinvigorate its offering in the UK. In his first ever interview, Nicklin speaks to The Drum about his ambition in taking on the job, his views on the industry and his plans for 2016.
The Drum is welcomed by AOL's recently employed UK managing director, Hamish Nicklin warmly when we meet at Microsoft's offices in Victoria. Nicklin is a well liked figure in the UK advertising scene, and is possibly one of the most amiable personalities around, so despite his having just appeared on stage for IAB Engage where he discussed his views on the ad blocking conundrum, he is as lively and talkative as ever.
He admits to never having been interviewed before in his career, a surprise to this reporter that he never put himself forward while moving through the ranks at Google until finally leaving after nine years at beginning of 2015. We've agreed to discuss his plans for the company amid major business deals being conducted as AOL attempts to meet boss Tim Armstrong's mission to become the most important media technology company on earth, however conversation deviates onto wider topics as we go.
What was it the drove you to join AOL from Google earlier this year?
The main driver for me was that I had gotten to a stage at my career where I wanted to really stretch and challenge myself. I’d been at Google for nine years and gone through some amazing growth and felt that I had contributed to a lot of that. But I had gotten to a stage where my focus was pretty narrow as is often the case in such a large organisation and I wanted to challenge myself. So when the call came asking if I wanted to talk to AOL, I thought they had some pretty impressive toys in the toy box that I would have the chance to sit above and grow the business and get it back on the map. That’s an awesome challenge.
What is your main priority?
Longer term the overall ambition is to be the world’s most important media technology company and that’s exactly what I’m going to try and do. Shorter term we need to get our ducks in a row to set ourselves up for success with the partnership with Microsoft and we’re waiting on Millennial Media to close. The integration of all of these businesses and working with Verizon to see how we can grow and let that investment to take us to the next level, that’s the short term priority.
What is your role being in helping scale 'the world’s most important media technology company'?
When you look at the assets we have here in the UK, from a content perspective we have the Huffington Post (HuffPo) and Engadget and our AOL Originals and then on the code side of the equation we have our DSPs on the video and display side and coming soon will be our DMP. We have a lot of the assets that allow us to scale and our role will be to lead the charge in the UK and demonstrate that international element of the world’s most important media technology company.
What does the Verizon deal mean for you coming in?
It’s the best time. I didn’t know about it when I was going through the interview process but while I was on gardening leave it happened and I thought ‘Brilliant!’ To have the backing of a Fortune15 company, what a brilliant time. I heard Tim Armstrong say at the time that he felt AOL had gone as far as it could go. Ok, definitely in the US but in the UK we can definitely sort ourselves out to get a few feet further up the map. But joining at a time when we have Verizon and Microsoft is such a brilliant time.
And what do you think the Millennial Media deal with do to help supplement everything?
Our mobile offering hasn’t been as strong as we would have liked, so what Millennial does, it’s one of the biggest and it gives us one of the finest mobile technology companies and media businesses. So adding that to our stable really strengthens our place at the mobile table. It gives us engineers, it gives us talent and it puts the final string in our bow.
From a content perspective, how will you develop that?
When I look at my plans for 2016 and beyond, I really want to consolidate those brands that I have, so I really want to continue and invest in HuffPo and Engadget and I really want to invest in original content. How that original content is branded, it depends on the content ideas we have. We have had the two AOL Originals this year with Being Mum and 30 Something but next year it may well be that they are HuffPo Originals or they are Engadget Originals, as opposed to just purely AOL. It all depends on what ideas we come up with.
There is a consensus, at least in the UK, that media buyers would rather buy HuffPo than AOL as it is a stronger brand. How do you view that?
I’m pretty cool with it because the way I look at AOL is that it is an umbrella brand which sits across a number of awesome brands, especially now that we have added Microsoft with Xbox, Skype, Outlook, MSN – these are strong brands. The need to focus on AOL, as long as people in the B2B community and Flinty [Stuart Flint, commercial director for AOL UK] and I do our jobs and the sales team continue to make people understand that AOL is the umbrella and that it has all of these amazing products underneath it, I’m ok with HuffPo being stronger.
We’re currently sitting in the Microsoft offices, so talk me through the relationship.
In two or three week’s time we will move into the same building, so sales, ops, marketing people who sit in this building will move over to Capper Street. That will immediately see us working more closely but I would like to think that they are already working more closely. There are a bunch of people who are ex-Microsofters sitting over in AOL and vice versa, so our hot desking approach has really helped build that collaboration. The teams can’t work as one AOL yet because we don’t know each other’s products. We’ve given ourselves six months to make sure that the teams have the skills and ability to talk about AOL inc before we go out and do that. We are working incredibly well. And having promoted Flint to be our commercial director across the whole lot speaks volumes about how we view this partnership.
What does the Microsoft relationship mean for you?
If Verizon gives us that backing of investment, whenever I speak to CEOs, Verizon means that they have the belief that we can be the world’s most important media technology company. Microsoft is evidence of it actually happening because it gives us scale, global reach and takes us into markets that AOL wasn’t in. It gives us 76 per cent reach of the UK online population at 39.5 million users. It’s a big chunk of scale that it gives us and puts us on the map as a top three must buy player which would have taken time to build ourselves.
What are your views on the growing ad blocking problem?
Unless we do something to sort out the underlying causes of why consumers want to download and use ad blockers, we could be in a pretty dark place. Some people have said to me that it’ll sort itself out and we’ll worry about it if it gets too bad. But how can we wait til then? Then we are worrying about it too late.
I’m not quite as confident that we’ll be able to find out own solution, we need to get to the root cause of the problem which is about consumers trusting the advertising industry to do the right thing.
Do you think that the industry is going along the right track?
It’s really too early to say. I’ve been aware of ad blocking for a time but even our own data didn’t suggest that it would be such a problem as it is. Even now it’s not a huge problem but it’s increased dramatically. Adobe claims it has increased 40 per cent year-on-year and in Germany it’s up to 30 per cent – that’s a problem if we get to that stage. So the industry needs to catch up and it some times takes time to move but when I heard about the IAB’s LEAN approach, I thought that was really sensible.
I’ve heard people say that it was for the publishers to fix, which has confused me because advertisers sign off the copy, advertisers sign off the use of data, we’re all in this together and we all have to move quickly to sort this problem out and to encourage a sense of openness and better creative that we hope will lead to a great sense of trust.
Surely the problem for publishers is that they need to then find another revenue stream?
Correct. Our view is that we are fully committed to an ad funded model. We are looking at some of the things the big guys in Germany are doing in putting paywalls up for those with an ad blocker but we are fully committed to advertising as a funding model and that is why we are investing in One Creative and One Display and One Video to make sure that we have the best use of data and creative and technology to try and solve this problem with advertisers and agencies.
So you are not yet looking at a plan B?
What impact have AOL’s brands seen from ad blocking?
That’s not information I necessarily want to share but it’s probably similar to what you would expect across the whole industry, so the impact is hard to say on revenue but it’s something we have to keep an eye on because if you do the maths, if you get up to 30 per cent of impressions being blocked, the maths speak for themselves.
Does that make you nervous at all?
No. I’m a fairly optimistic dude and we’ll find a way. I grew up in the 80s when there were some amazing ads. There was a period of advertising which was golden. My wife still sings the Um Bungo ad today, she knows it word for word and that to me is an example of advertising in its most brilliant form. If we can get digital to get to that same golden age of advertising then consumers won’t have a problem because it’s part of the experience. The value exchange between an advertiser and a consumer and the content they are trying to consume, if you can give them that then they are not going to have a problem. People don’t want to block adverts per se – they want to block irrelevant interruptions that have no value.
Google has a far more closed off approach to advertising platforms than AOL, which has an open approach – have you had to change your mind as to which is best since making the move?
I’m firmly in the open camp. The irony is that when I was at Google I thought we were open, whereas here I now see what ‘open’ really means and for us it is a different proposition. We have to be open. Our technology allows you to plug in whatever tech you like because why should we force advertisers to use a particular advertising solution? As long as we can provide a better experience overall then it’s going to be best for everyone.
For me the positive upside of it is that people will then start to use our platforms a lot more because you can plug and play with ours and that they start seeing the value of doing that and that our tech is very powerful. We know that with One Video (Adapt TV), the uptake on that is huge because it works. That’s because it’s an open platform both on the supply side and the demand side and that encourages people to want to use our platforms more and we’ll need to see how that pans out. Advertisers want us to be more open and they are our customers so that breeds a sense of adventure and creativity which will help us solve our advertiser’s problems in a better way.
How is the content marketing side set to develop?
We’re just going to go deeper in it. We invested heavily in our content team this year, we’ve grown it a lot and joining forces again with Microsoft is brilliant because they are award winning. The Monty the Penguin [for John Lewis] stuff is fantastic and it’s great to have that creativity as part of our content stable. What I want to do is ask brands, advertisers and agencies; ‘What’s your business problem and how can we solve it?’ We would do that looking at what sort of content we could create as we have access to some fantastic production companies and we have amazing platforms in HuffPo, Engadget and Xbox to distribute that stuff. We have amazing technology now in Connect and Skype and combining all of that together gives us the opportunity to create something for advertisers and that is embedded in content.
How will the integration of the Verizon/AOL/Millennial Media/Microsoft data tie up affect your offering in the UK? Will AOL be less generous in terms of the data it passes back to advertisers?
I can’t talk about Millennial because that hasn’t closed and exactly what data we are going to get access to I don’t know yet and I don’t know what that’s going to look like. In regards to Microsoft and Verizon, outside of the US with the Verizon data we are still trying to figure out what we’ve got. The majority of their offering from a B2C perspective where they have the consumer data is US based so for us here it’s really a matter of how we fuse the Microsoft and AOL data. Will we be less generous? I don’t think so. Ultimately that’s not what we want to do because we see the value in data so combining our data sets where we can; we want to use the Microsoft data in the same way it would have used it, so in the same respect for privacy but I don’t see why we would want to be less generous. For me it’s an opportunity to come up with better data solutions because we have better data sets. We have work to do in the back end, but who doesn’t as to how we fuse all that stuff together, but I don’t know why we would go backwards in terms of generosity.
How will the Microsoft and AOL sales team be integrated?
We’ve already started with Flinty taking the helm of both. The idea is that we go through another three or four months of training each other on our products and making sure that incumbent AOLers can talk about Microsoft products and the new AOLers from Microsoft can talk about our products and that everybody can talk about the total proposition. The idea being that early next year we go to market with AOL inc as our front. It’s the umbrella brand supported by all the sub brands that we operate and we have generalist sales people who go to the market to talk to advertisers and agencies about business problems because at the moment I get a sense, certainly on the AOL-side, its quite narrowly focused on lower down the funnel campaign problems as opposed to business problems. Now that we have the huge stable of culture and code and the assets that underpin those, we can genuinely solve those business problems, because we have scale too. So it’s not just one thing you can do within the offering, that scale allows us to do so much more and solve problems. The generalist sales team would go out and sell AOL inc, supported by a bunch of specialists who can be brought in to really drive forward particular product ideas.
What excites you about next year?
I’m genuinely excited about the two sales and ops teams coming together and having another big player enter the market and offer different solutions and watching them come together, because already they are excited and watching that unfold is what I find exciting.
Nicklin is also one of the speakers set to talk at this week's IAB Digital Upfronts sessions in London.