America Online (AOL)
Inducted in 2000

Pursuing Innovation with a Vengeance

As Jan Brandt, President of Marketing for America Online, tells it, the story begins when she phoned Steve Case one day in July 1993.

"I want to do a direct mail campaign with the AOL disks. It'll cost about $250,000," she said. "It's not going to work, but go ahead," Case responded.

It worked.

That initial mailing morphed into one of the most famous marketing campaigns of all time -blanketing the U.S. with millions upon millions of AOL disks and in the process turning the AOL disk into a part of popular culture.

The strategy was risky - but there was method behind the seeming madness. Only a few Americans had ever heard of the Internet when AOL launched the mailings, and even fewer were actually online. Other brand-building methods -television commercials or print ads - would only have produced blank stares if you tried to describe "online." So the fledgling firm, with just 244,000 members in 1993, pursued its "show and tell" strategy.

AOL disks were distributed or promoted not only through direct mail, but as attachments to magazines, newspapers and phone books; through kiosks; at barbers and hairdressers, airports and movies; at football games and amusement parks; in merchandise product shipments (for example, frozen with steaks!); on music CDs; and even in cereal boxes.

Though some may have scoffed at what they thought was an "everything but the kitchen sink" approach, the strategy was a carefully targeted one, involving a gradually widening circle of targets that moved from early adopters - the "techno-geeks" -to hobbyists with an interest in computing, then work-related computer users, and ultimately the mass-market.

Brandt today says she knew she had achieved her goal when she captured the ultimate mass-market consumer: her mother.

But Jan Brandt and AOL have reached far beyond her mother. The service's membership recently passed the 22-million mark. Peak simultaneous usage has passed 1.6 million - outpacing several leading cable networks' ratings. And at 54%, AOL's unaided brand awareness is many times its closest competitor's.

The company's marketing success reflects not only ubiquity, but also its commitment to sophisticated research. AOL develops and conducts thousands of list, pricing, creative and packaging tests and highly sophisticated market research.

Moreover, AOL has pursued innovation with a ~ vengeance. It was the first to give away software for free and include a trial period, to polybag disks with magazines, create sample boxes and put its service on music CDs; the company has also been an innovator in brand-building through other media- AOL was the first to develop branding mentions on network programming. To achieve its ambitious goals, AOL even created the means to automate disk-packaging and distribution.

Its focus on convenience and ease-of-use has defined AOL as the choice for new users, allowing it to reap more than half of those entering cyberspace.

And the company's marketing success has extended beyond its flagship AOL brand: the company seized the initiative in consumer rebate programs to revitalize CompuServe and turn it into one of the nation's fastest-growing ISPs.

Of course, there's one more element behind AOL's legendary marketing success. After all, others have distributed disks, researched extensively, and even introduced innovations like rebates.

The trick, Brandt insists, is to do it better, cheaper and smarter than anyone else. Her competitors, lagging far behind, must certainly agree.