America Online, Inc.

Author:Ed Dinger

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22000 AOL Way

Dulles, Virginia 20166


Telephone: (703) 265-1000

Fax: (703) 265-1101

Web site:


America Online, Inc. (AOL) emerged in the 1990s as the largest Internet service provider (ISP) in the United States, a feat it accomplished in large measure through the mass distribution of start-up CD-ROMs and free trials. Many of its customers were families and people new to the Internet who were won over by AOL's claims that it was easy to use. By the early 2000s, however, AOL's strong growth came to an end, and it began to lose subscribers to cheaper dial-up ISPs as well more expensive but much faster broadband providers. On its rise to the top AOL had netted a great deal of Hispanic customers, and as a matter of course AOL became the leading portal for Hispanics. They were an alluring demographic—fast growing, family oriented, and cost conscious—making them an ideal source to replace the dial-up customers that AOL was losing at an alarming rate. To better attract and serve this market, AOL launched a Spanish-language portal called AOL Latino in September 2001. While AOL reached out to the Latino market with Spanish-language advertising, the commercials were merely translated versions of material developed for the general population. In 2003 AOL finally hired an Hispanic advertising agency, Casanova Pendrill Publicidad, Inc., and released an advertising campaign that was specifically developed for the Hispanic market.

The AOL Latino campaign, the budget of which was not made public, unfolded in waves and included television, radio, print, outdoor, and Internet elements. The early TV spots highlighted AOL features that were popular with Hispanics: music downloads, education support, and instant messaging. Later the campaign emphasized the theme of empowerment, stressing the idea that having the Internet in the home was important in the educational development of children.

AOL was pleased with the results of its Latino campaign. Although the company did not reveal subscriber gains, the campaign clearly solidified AOL Latino's position as the number one Spanish-language ISP. Furthermore, it helped mitigate AOL's continuing loss of general-population subscribers.


The precursor of AOL was Q-Link, an online service established in 1985 for owners of Commodore personal computers. The company that operated it, Quantum Computer Services, changed its name to America Online in 1991. With the advent of the World Wide Web in the 1990s, an increasing number of people bought personal computers to take advantage of the Internet. AOL vied with two other early online entrants, CompuServe and Prodigy, to become the market leader among Internet service providers (ISPs). AOL was relentless in its efforts to distribute start-up CD-ROMs and

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enticed new subscribers with free trials of its service. AOL was successful in selling itself to parents who wanted to maintain limits on content for their children; it also attracted customers who were simply new to the Internet and preferred more guidance than was available with other services. In 1997 AOL became America's largest online service, boasting 8 million subscribers, a number that would double just a year later.

During its rise to the top AOL attracted a large number of Hispanics. It was not until September 2001, however, that it launched AOL Latino to cater specifically to the Spanish-speaking market. In July 2002 the company established a U.S. Hispanic interactive-marketing unit. By this time AOL had merged with Time Warner, creating the largest media company in the world, and the online unit came under increasing pressure as the subscriber base, which had reached about 25 million in the United States, began to erode. AOL was losing out on one end to cheaper dial-up services and on the other end to providers of faster high-speed Internet connections. As a result it began to view the Hispanic market as an important source for replenishing its pool of customers. In January 2003 Advertising Age reported, "2.5 million Hispanic households [were] likely to go online for the first time in 2003, and … those new to the Internet [were] increasingly Spanish-dominant." In January 2003 Casanova Pendrill Publicidad, an ad agency that was part of Interpublic Group and was based in Irvine, California, was awarded AOL's Hispanic advertising account. In May of that year AOL released its first-ever comprehensive campaign targeting Hispanics, both to reinforce its position as the top ISP for Spanish-speaking Americans and to attract new business. Prior efforts were simply Spanish-language versions of advertising created for mass audiences.


In 2000 the Hispanic population in the United States numbered more than 40 million, or about 13 percent of the overall population. It not only was the largest minority group in the country but also was growing at a fast clip: about 5 percent each year, four times faster than the general public. Thus, according to the U.S. Census Bureau, by 2010 there were expected to be 50 million Hispanics in the United States, making them an increasingly inviting opportunity for marketers of all stripes. The AOL Latino campaign targeted bilingual and Spanish-dominant speakers who either planned to switch ISPs or intended to begin using an ISP in the next 6 to 12 months. Within that group AOL looked to appeal to families, as it did with the general population. Mary Ann Donaghy, AOL's executive director of marketing strategy and new-product development, explained to Advertising Age, "Hispanic Internet users tend to be younger than other users, are more likely to use instant messaging and to download music and videos, and spend more if they shop online, especially on music and DVDs." Therefore they were an ideal audience for AOL's product-enhancements pitch, which addressed these activities.


America Online, introduced by Stephen M. Case in 1985 as a small dial-up Internet service called Q-Link, evolved into a media powerhouse 15 years later. In 1999 it acquired the companies Netscape Communications (known for its Web browser), MovieFone (a ticketing service), and two major Internet music providers: Spinner Networks and Nullsoft. A year later it added the mapping-services company MapQuest, and in 2001 it merged with Time Warner in a $183 billion deal that created the largest media company in the world. Case was named chairman of the new behemoth.


In appealing to the Hispanic market AOL faced much of the same competition as it did with the general population, because many in the target demographic were bilingual and might easily choose an English-language Web interface over a Spanish-language one. Hispanics tended to be very price sensitive, so they generally opted for dial-up connections. Thus, AOL had to contend with cheaper dial-up ISPs, such as Earthlink, the NetZero and Juno brands of United Online, Yahoo...

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