AOL’s (AOL) Devil Creates Comfortable Place for Advertisers
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Rating Summary:
1 Buy, 18 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 14 | Down: 11 | New: 17
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AOL (NYSE: AOL) is taking an interesting approach to grab advertising dollars that, in the view of analysts, could help it capture unmet demand. Dubbed “Project Devil”, the program allows advertiser to introduce brands to consumers without having to discount products.
The brand identity of the Internet today is about discounting, said analyst Laura Martin, an analyst with Needham and Company. Consumers go to the Internet when they already know what they want to buy and they expect to get it for a discount online. But some branded advertisers do not want to introduce themselves to their next client via a discount.
“Many premium brands spend millions of dollars a year in TV, radio, magazine and newspaper advertising creating a price-premium brand. The discounting focus of the Internet is one reason that the largest advertisers have been largely absent from the Internet to date,” said Martin.
Large brand advertisers do not want to risk the advertising dollars spent on TV to build their brand message undercut by discounting on the Internet. AOL’s “Project Devil” is targeted at capturing this unmet demand.
“AOL has excellent relationships with large brand advertisers and is delivering what they are asking for- a safe environment of content with only one advertisement per page,” says Martin.
Needham and Company has a Buy rating on AOL and a price target of $40.
For an analyst ratings summary and ratings history on AOL, Inc. click here. For more ratings news on AOL, Inc. click here.
Shares of AOL, Inc. closed at $34.61 yesterday.
The brand identity of the Internet today is about discounting, said analyst Laura Martin, an analyst with Needham and Company. Consumers go to the Internet when they already know what they want to buy and they expect to get it for a discount online. But some branded advertisers do not want to introduce themselves to their next client via a discount.
“Many premium brands spend millions of dollars a year in TV, radio, magazine and newspaper advertising creating a price-premium brand. The discounting focus of the Internet is one reason that the largest advertisers have been largely absent from the Internet to date,” said Martin.
Large brand advertisers do not want to risk the advertising dollars spent on TV to build their brand message undercut by discounting on the Internet. AOL’s “Project Devil” is targeted at capturing this unmet demand.
“AOL has excellent relationships with large brand advertisers and is delivering what they are asking for- a safe environment of content with only one advertisement per page,” says Martin.
Needham and Company has a Buy rating on AOL and a price target of $40.
For an analyst ratings summary and ratings history on AOL, Inc. click here. For more ratings news on AOL, Inc. click here.
Shares of AOL, Inc. closed at $34.61 yesterday.
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