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Falco 1 on 1: How the Net is Different

Falco 1 on 1: How the Net is Different Brad Berens

As Chairman and Chief Executive Officer of AOL LLC, Randy Falco is responsible for setting strategy and overseeing the businesses and operations of this global web services company. Falco joined AOL in November 2006 from the NBC Universal Television Group where he was President and Chief Operating Officer.

Editor's note: Don't miss our coverage of Randy Falco's opening keynote address at the iMedia Brand Summit in Coconut Point, Florida.

Brad Berens:  First of all, congratulations on the new job.

Randy Falco: Well, thank you very much. 

Berens: You have been doing it for about a month now, or two months?

Falco: Just shy of two months.

Berens: Let me just dive right in. The question on everybody's minds is: what do you think of your new job? Why did you do it? What are you bringing to the table? And, what is the thing that scares you the most?

Falco: First, everything about the new job excites me: the strength of the AOL brand, the size and the scope of the business, the increasing power and relevance of the internet as a marketing tool. And, in terms of what I bring-- I think I bring a healthy appreciation of how to partner with brand marketers to help them achieve their goals of brand awareness and moving product. I also understand how important the consumer is to the overall equation, and how the internet can help marketers learn more about their customers.

Berens: For what you said about consumers, the old days of marketing -- which are pretty much from when marketing started until, really, just the last few years -- have been that marketing is kind of a one-way street.

Falco: That is right.

Berens: And now -- and this is the big difference with the internet -- not only can the consumer, can the audience, talk back to the marketer -- to the media property, to the publisher -- they can also talk amongst themselves. With your long and prestigious career at NBC, and in television, how is the difference in audience behavior online a new complication for you? 

Falco: I view it much more as an opportunity than a threat. For too long, marketers have been like publishers, if you will. They've had a one-way conversation with their customers. The strength the internet gives us is that you now can have a two-way conversation with your customer. You can learn more about that customer, what their wants and needs are. 

I believe that marketers, going forward, are going to have to give up a little bit of the control that they have always had, in terms of their messaging. And, if they trust in the consumer, ultimately, to help them with that messaging -- to share the messaging and the brand awareness -- it will be a very exciting environment for marketers going forward.

Berens: Here at iMedia, we have a mission: to advance the cause of interactive within all marketing. We are boosters for interactive. And certainly, having (as I said) such a prestigious television person as yourself come into the internet and be one of our advocates is fantastic! And so, the question I am leading to is this: we still have a lot of resistance to people working within interactive. Since you have an unusual attitude, and since you are seeing interactive as an opportunity rather than as a challenge, I am wondering if you might be able to characterize why that resistance exists?

Falco: I think that marketers in general, frankly, just like broadcasters in general, are traditionalists. They are used to having one-way conversations with their consumers. Going forward, if they are willing to give up a little bit of control, and have a little trust in the wisdom of their customers, then they will find that they will open up for themselves an unprecedented amount of information about their customers.

Berens: It just happens to be a lot more work than buying a thirty-second spot on television, figuring you are going to reach a few million people, and then calling it a day.

Falco: There is no question about that. But the ROI equation is going to become increasingly important to marketers. And, they are going to find that the extra work is going to have an appreciable, bigger payback than just buying a thirty-second spot.

Next: Is the internet more than a DR medium?

Return to Page 2

Berens: Let's talk about changes in the internet itself, because I think that last year -- 2006 -- is arguably either the year of social networking or the year of new frontiers in online video. Or, it was the year in which those two phenomena were involved in something that could be either a marriage or a celebrity death match. I am not sure which.

As a consumer and watcher myself, I have been interested in how YouTube has taken what previously we have called a "Lean Forward" environment, where people are active. They are doing things. They are engaging in the way you have so adeptly characterized-- they are sharing things and talking amongst themselves. 

Then, suddenly, we have YouTube -- and, of course, also with other video entities, like AOL -- taking this phenomenon and changing it into a hybrid, where it is also a "Lean Back" environment.

What do you think is going to be changing in terms of audience behavior online? And also, how does this change the environment for marketing?

Falco: It is much more of a Lean Forward environment than a Lean Back. There is not a lot of traditional media that is being consumed on the internet. It is much more user-generated. People want control. They want to put together their own pieces. They have become editors. And, they take snippets of different pieces on the internet that they find, or have been given by their friends. They put it together, and they are very creative; and, they send it out. And, people are digesting more of the user-generated video than they are traditional video.

Berens: And, you think that is going to continue? You think the appetite is growing for more Lonely Girls and more Ask the Ninjas-- that sort of thing?

Falco: I absolutely do. And the next big challenge to marketers is: how do they feel about participating, or putting their brands next to user-generated video? It is up to us in the internet space to find ways that make them feel safe about doing this.

Berens: That certainly is the scary part. If you are an airline, you do not want to put your brand on the news, in case the news has a plane crash that day. 

Falco: No.

Berens: Do you think that consumers really have that kind of belief that there is some kind of brand leakage between the content and the advertising? I understand that if you are doing a wonderful story about Hawaii, and then the next commercial is a commercial for American Airlines going to Hawaii, that that is a way of associating things positively. But, I have always been skeptical about whether or not I would blame American Airlines for a plane crash story if they were the advertiser.

Falco: Yes, but if you are an advertiser why take the chance? 

Berens: Fair enough.

Falco: All the research we did, for example, on the Olympics showed that there was an incredible nexus between good feelings about the Olympics, and the American Olympic team, and the sponsors of the Olympics and the Olympic team. So, there is something obviously very positive. On the negative side, if you are an advertiser, then why take the chance? Why associate your brand with something that might be viewed in a negative?

Berens: And, is AOL in the business of figuring out how to give the marketers that kind of control? Or, at least, if not control, that sense of predictability?

Falco: Absolutely. Or comfort.

Berens: Let me go to the personal for a moment: you have been there for two months.

Falco: Right.

Berens: There has to have been some moment early on where you just thought, "Wow! I did not know that." Or, where you thought, "Oh no! I did not know that." So, are there any memorable surprises, or moments of illumination, in your first eighty days, or so?

Falco: Honestly, no. At the end of the day, it is still media. And I understand media. And, I understand marketing; and, I understand what brand advertisers want from a media partner. That is all good.

Editor's note: Don't miss our coverage of Randy Falco's opening keynote address at the iMedia Brand Summit in Coconut Point, Florida.

Brad Berens is the editor in chief and chief content officer for iMedia Communications. Read full bio.

 at the iMedia Brand Summit in Coconut Point, Florida.

Brad Berens is the editor in chief and chief content officer for iMedia Communications. .

A trusted advisor to companies of all sizes and a respected voice within the interactive media industry, Dr. Brad Berens has enjoyed a wide-ranging career that features storytelling as an organizing theme. These days, he divides his time among...

View full biography


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