AOL has recently announced that it would be laying off a minimum of 150 “hardworking” folk on their advertising sales team. Why do you ask are they dumping all these people? You guessed it, they are being replaced with computers that will use programmatic advertising. No more human sales people. They are also squeezing their sites TUAW and Joystiq into Engadget, both of which became acquisitions in 2005 of Weblogs which had operated almost 90 blogs.
AOL claims there is nothing to worry about as far as their advertising clients are concerned, the move towards automation was to improve their working relationships. Well the proof is in the pudding, we’ll find out soon enough if this turns out to be a catastrophe. Anyone with half a brain has become cognizant of the fact that technology and media have basically become intertwined. Consumers have become more dynamic in their interests and how they respond to things.
In a memo from AOL posted on Business Insider, Bob Lord, president of AOL states “We’ve made it our mission to simplify the internet for consumers and creators with culture and code… We are committed to providing brands and agencies with best in class content and programmatic solutions across all platforms, increasing our investments and expertise in both areas and establishing a more unified go to market approach”.
So there you have it, replaced with machines, he continues “I realize that this change may mean a shift in the core AOL team on your business and that may initially feel uncomfortable; however, please know that your needs are at the heart of this transformation”. Bzzzt, beep, beep, boop, do you hear the robots taking over the offices of AOL, or is it just me? You have to realize right now this is just 3% of their staff. If AOL gets a taste of any increase in gains, you can bet there will be more and more departments having tumbleweed rolling through them.
AOL said revenues from last quarter from programmatic has risen by 37% in their non-search ad sales, in 2013 third quarter it was only %12. Automated ad selling is cheaper and they’ll do anything to grow those profits. During AOL’s third quarter they made $454.5 million from combined advertising revenues amongst all their properties. This is close to 75% of their total quarterly revenue.
So in closing, no mystery that the layoffs will continue not just at AOL, but in virtually every media company across the digital spectrum because machines can drive costs down and do work non-stop. You should actually be rejoicing because these machines are supposed to be making life on Earth better, unfortunately no one has solved the “you need money to survive” problem. Maybe AOL is working on a solution to this?