AOL to Start Advertising on TV Again, With Commercials for New Subscription Service Gathr
More than nine months after AOL shelved plans for a hip-hop-inspired TV commercial that would have been the first TV ad of CEO Tim Armstrong’s tenure, the company has decided to make a return to TV advertising.
AOL is planning a multiplatform ad campaign that includes TV commercials to promote Gathr, a new service it is launching publicly today, the company’s membership and paid services chief Bud Rosenthal said in an interview on Friday. The TV spots will air this fall, but won’t run nationally, instead focusing on three markets: Seattle, Minneapolis and Atlanta, according to an AOL spokesman.
Gathr, which has been in a private testing period since early this year, bundles together offerings from companies such as Pandora, LivingSocial, and Amazon into one monthly subscription. At launch, AOL is offering a choice of six pre-bundled packages, ranging in price from $15 to $30 a month, with an option to customize bundles, as well.
Gathr pre-bundled packages are loosely organized around themes. The “4 Fun” package, for example, costs $20 a month and includes a subscription to Pandora One, the streaming music service’s ad-free option; promo codes for five free one-day DVD rentals from Redbox; a $25 gift card to Restaurant.com; and a $10 promo code for LivingSocial.
Other subscriptions offered through Gathr include magazines such as Cosmopolitan and National Geographic, and services such as LifeLock and Norton AntiVirus.
The company is betting that Gathr may become a new growth driver in its subscription business, at a time when its revenue from subscriptions bundled around Internet access continues to fall. And that the lessons it learned by bundling different products and services with its Internet-access service to give people a reason to keep spending money with AOL can provide guidance for this new subscription business.
“We’ve made a huge amount of progress in fighting churn,” Rosenthal said, referring to the Internet-access business. “And some of the things we’ve done there gave us the platform and core competencies we knew we always wanted to leverage for other growth.” While shrinking, AOL’s subscription business still generated $332 million in revenue in the first half of this year.
Gathr will continue to add new partners to its subscription bundles, and hopes to eventually incorporate services from startups, he said, citing Dollar Shave Club and Birchbox as hypothetical examples.
While AOL still has a sizable subscription customer base to market to, Rosenthal said that the main focus would be on acquiring new customers. As it pursues this new initiative, AOL seems to have abandoned plans for Bling Thing, a subscription commerce business idea that AllThingsD reported on in May.