<http://schema.org/articleBody>
"For his day job, Brian McCullough is the CEO of ResumeWriters.com and has founded several companies in the online careers space. He started the Internet History Podcast as a crowd-sourced history project in February of this year. You can subscribe to the podcast here.\nJan Brandt is a legend in the world of marketing. She singlehandedly led the famous AOL \u201Ccarpet-bombing\u201D campaign that put millions of AOL trial discs and CDs in everything from magazines to popcorn boxes to banks. In the most recent episode of the Internet History Podcast, I spoke to Jan about this famous campaign, how the strategy developed and the analytics and data that went into it. What follows is a lightly edited transcript of portions of our conversation. Click above to listen to the whole thing, or download it in iTunes here.\n\nBrandt was been recruited to AOL in 1993 with a simple mission: grow the subscriber base. At the time, online services were a novel product. The majority of American homes didn\u2019t have computers yet, much less, computers with modems. Also, AOL was a distant 3rd or 4th in the online services market, behind CompuServe and Prodigy. So Brandt was given free reign to get creative with her marketing efforts. Prodigy was famously spending millions of dollars on flashy television ads. But Brandt was convinced that old-school, unsexy, direct marketing might be the key to standing out. After all, she needed to get people to try the service, and the only way to do that was to get the AOL installation discs in their hands.\nWe started packaging them [the installation discs] in boxes and tins and things like that. It was my absolute belief that you could not send someone a package in the mail\u2014and I don\u2019t mean an envelope, I mean a package that you could feel\u2014and not open it. I felt that it was constitutionally impossible for someone to get a small box in the mail and not be inspired to open it.\nArmed with this belief, she phoned up her boss, AOL CEO Steve Case, and asked for money to experiment with a direct mail campaign. Case was skeptical, but gave her the go-ahead.\nThe campaign was going to cost $250,000 and that was our first campaign. It was a lot of money for us at the time. Steve teased me that it wasn\u2019t going to work. I mean, he has, you know, something of a dry wit. But he backed me completely. He backed me on that and he backed me on the next millions of dollars.\nIt turned out that the campaign exceeded her wildest expectations. In the direct marketing arena, a response rate of 2-3% for a campaign is considered a home run success. But Brandt was seeing response rates which were multiples of that.\n\nI\u2019ve done a lot of first campaigns and launched a lot of products [...] I have never\u2014 this was beyond imagination. [...] The overall response to that campaign was a staggering over 10% uptake. And remember, this isn\u2019t people who are saying, \u2018I think I want this.\u2019 These are people who are taking the disc, putting it into the computer, signing up, and giving us a credit card. The top list, for that, I have never seen in my life before\u2014or since\u2014was a 20% response. It was stratospheric.\nWhen I saw that, honestly, it was better than sex.\n\nThis emboldened Brandt to start thinking even more outside the box. All she needed to do was get discs in peoples\u2019 hands. What other ways could she reach people? Inspiration struck her one Friday night at Blockbuster, after a long workweek.\n\nOn the weekends, I\u2019d go into Blockbuster and I\u2019d pick up like eight movies at a time. Weekends, for me, was watching movies and working. And they had a sample box there. If you took three movies, you could get one of these boxes free. And in the box were things like product samplings. [...] I walk up to the front desk with my eight movies, because I don\u2019t know what mood I\u2019m gonna be in on Sunday. And I said, \u2018I\u2019ve got eight movies, and I\u2019m taking two of these boxes.\u2019 Monday morning I took them into [the office] and said, \u2018I want you to get us a disc in here.\u2019\n[...]We knew that one of the cohorts that was important for us in the early days was \u2018presence of children in the home.\u2019 People were buying computers, frankly, I think\u2026 this will be good for school and for kids and the homework. But actually, I think, it was the father that wanted to tinker with the computer. And so, I\u2019m looking in Blockbuster, and I\u2019m saying, \u2018There\u2019s a lot of guys in here and I know that they have kids.\u2019\n[...]Blockbuster was the first one. Blockbuster to me, was really an inflection point. It was the first one where I said, \u2018Oh, my god. We\u2019re really mass-market.\u2019 [...] And the response to that was about 3%. The percentages really depend on the product and the offer. Sort of a rule of thumb is, in terms of a box like that, a take-one box, usually you\u2019re happy to see something at about a 0.3% response. So we\u2019re at 10X and I\u2019m like, \u2018Wow!\u2019 And that was really what started\u2026 it was the Blockbuster box that put me off to the races.\n[...]And then it was, we will try anything.\n\nAnd they did. Soon, AOL discs, were soon popping up everywhere. On airplane seats. In cereal boxes. On the counter at your bank. They were willing to experiment with almost any partner.\nWe packaged floppies into packages of Omaha Steaks. So that sounds interesting all by itself. But what we had to do was flash freeze the floppy. Thaw it out\u2026 cause it had to travel with flash frozen meat. We had to thaw it out and see if it still worked. And, it did.\nBrandt was so fanatical about making it easy to get discs in people\u2019s hands that, for a long time, she fought other executives inside the company to keep the startup program small\u2026 so it could still fit on one single disc.\nI was crazed about that. There was a lot of struggle internally, because the software [to install AOL] was becoming more and more complicated. [...] And, yeah, I wouldn\u2019t allow it to go on to two floppies. Because, it\u2019s all about the consumer, stupid. It really is. And making it easy and taking away barriers is what good marketing has to do. I really felt that having it on two floppies, and have to manipulate that would be a barrier. We\u2019re talking about back in days when I did focus group research\u2013and we\u2019re watching this\u2013and someone took a computer mouse and is pointing it at the computer like a remote control. And one person put it on the floor and tried to use it like a sewing machine pedal.\nSo for a long time, AOL software was not as sophisticated as it could have been because Brandt fought to keep it simple for the marketing campaigns.\nEventually, of course, the software migrated over from floppy discs to CD-Roms. CDs were cheaper to produce and virtually indestructible. There is a famous Quora thread that both Brandt and Steve Case commented on, with Brandt claiming, \u201CAt one point, 50% of the CD\u2019s produced worldwide had an AOL logo on it.\u201D I asked her if those numbers were correct and how much AOL would go on to spend on these sorts of marketing efforts during the lifetime of the campaigns.\n\nThat\u2019s absolutely correct.\nIf you\u2019re asking the question in terms of total marketing spend, it was definitely in billions.\n\nThe \u2018carpet-bombing\u2019 of discs and CDs was instrumental in catapulting AOL to the head of the online services market. So much so that it begs the question why competitors didn\u2019t just copy what Brandt was doing.\n\nSomeone once asked me what kept me up at night. I said, \u2018I wake up every morning worried that I\u2019m going to see Prodigy or CompuServe using the discs the way that we\u2019re using them. That I\u2019m going to see it stuck on the front of a magazine or see it in the mail.\u2019 And the thing that was really interesting\u2026 I gave very few interviews. I would never have talked to them [the press] the way I\u2019m talking to you about it now. Because I felt like I was sitting there with the secret sauce.\nTed Leonsis [another AOL executive] was once on a panel with someone from CompuServe. And the guy from CompuServe said to Ted, \u2018You guys are crazy. And that person running marketing has gotta be a nutcase with the amount of money that you\u2019re spending on these discs.\u2019\nAnd Ted comes back and reports this to me. And I said, \u2018Next time someone says that, agree that I\u2019m a dumb broad, and that you\u2019ve been trying to get me fired from the company for a long time.\u2019 And the reason for that, really, is, I couldn\u2019t believe that they weren\u2019t trying it.\n\nBut AOL\u2019s success did get the attention of Microsoft.  Before launching MSN as a direct competitor to AOL, Bill Gates came calling to feel AOL management out about an acquisition.\n\nI wasn\u2019t at this meeting. So, I just know this from hearsay but the hearsay was from a very high source. This was a meeting in which Bill Gates basically said, \u2018I can buy you or bury you.\u2019 I don\u2019t know if those were his exact words but that was the content that I got out of it. I remember Steve and I having lunch shortly after that, and I just looked at Steve and said, \u2018Well, what are we going to do?\u2019\nAnd he says, \u2018I\u2019m not selling.\n\nCase was right to stick to his larger vision of AOL as something more than just Microsoft\u2019s online entrant. AOL, in no small part thanks to Brandt\u2019s continued efforts, would handily defeat MSN in the marketplace. Brandt credits AOL\u2019s triumph, again, to simple marketing\u2026\nIt was the product positioning. Our service was called America Online. Microsoft\u2019s service was called Microsoft Network. It really showed the focus of the companies in my view. Microsoft about Microsoft and AOL about customers. And CompuServe was just sort of a geeky name.\n\u2026but also to an early deal that AOL struck with Microsoft to make Internet Explorer the default web browser on AOL, in exchange for getting AOL an icon presence on the Windows 95 desktop. This was in the era when Microsoft and Gates were doing battle with Netscape for browser supremacy. Microsoft was booting Netscape\u2019s Navigator off the desktop; but AOL was now gaining this prime foothold, and it would prove to be insanely valuable real estate.\nI believe that the subscribers we got from them [Microsoft] were either free or very low cost. And we were getting 600,000 subscribers a year from that source. It was huge. It was a sweetheart deal but it could have backfired.\nIndeed, there was fear inside the company that Brandt\u2019s own success in growing the subscriber base might backfire. Occasionally, she was subtly encouraged to ease up a bit so that the network could absorb all the millions of new users she was bringing in.\nIn our first offices in Vienna Virginia, we had taken over some offices that were owned by some high security firm. They had this big safe. Huge safe. Like a small room. It was on the technology floor and I was up there visiting somebody in technology. They sort of lured me into the room, and I didn\u2019t know what it was, and locked me in there. And said, \u2018Now, stop it.\u2019 All in jest. People would come and tell me to, you know, take my foot off the gas. And I didn\u2019t.\nBut the fears were not unfounded. Most famously, when AOL switched to unlimited monthly usage and flat rate pricing (as opposed to billing by the hour like it had done since the service\u2019s inception) the influx of users who could now stay online all day almost broke the network and the company.\n\nThis is where I give Steve [Case] just, enormous, enormous credit for his vision and understanding. He was on the right side of this, and that was to absolutely go unlimited. And I was not, initially. I had data and I had projections on how much money we would lose. [...] We had so many people that were paying us $50, $60, $70 [a month, because of the hourly fees and overage charges as they existed at the time]. So for a long time, Steve and I had a lot of discussions. And he brought me over to his side; but I have to say that it\u2019s a decision that was very, very, very tough for the company. It took its toll all over the company because it was so controversial and had such a huge impact, not only on the finances. It was like jumping off a cliff.\nIt would be hard to say that there was no panic. I know that we really didn\u2019t anticipate the extent of\u2026 we knew there was going to be a problem but we really didn\u2019t anticipate the extent of it. We didn\u2019t really have an internalized grip on how important we were to people\u2019s daily lives. What we didn\u2019t calibrate was the ferociousness of the response. It was crazy and it was really enlightening. It was like, \u2018Oh my God! People love us! They really love us!\u2019\nOr, at that point, they love-hated us.\n\nAOL would, of course, survive the \u201CAmerica On Hold\u201D fiasco, and continue its growth trajectory, eventually passing 20 million subscribers and, by the late 90s, was singlehandedly responsible for the vast majority of Internet usage.\nWhen I asked what other factors contributed to AOL\u2019s dominance in the late 90\u2032s, Brandt was quick to point to a single product: AOL Instant Messenger, or AIM, which was launched after AOL purchased ICQ.\nI really think it [AIM] was the foundation of how we\u2019re all communicating now. It\u2019s the predecessor to texting. I looked at the purchase of [Whatsapp] and I said, \u2018It\u2019s what we did. It\u2019s like ICQ.\u2019 In the instance of ICQ [like Whatsapp] they were largest internationally. Our footprint was huge almost exclusively in the United States.\nAnd of course, AOL\u2019s wild success would, at the end of the Dot Com era, lead to the merger with Time Warner, which was decidedly not such a wild success.\n\nI really felt, personally, that it was brilliant conceptually. [...] They had amazing content, and let\u2019s not forget, they had the cable company. It was at a time when we were struggling to cut any kind of reasonable deal on broadband. People will say to me, \u2018Well, gee, why didn\u2019t you guys do broadband back then?\u2019 And I sort of smack my head [sarcastically] \u2018Oh! We never thought of that!\u2019 [...] The deals we were able to cut [with broadband providers] were just crazy and expensive. It was horrible. So, the notion of getting a cable company was brilliant. And the content that came with Time Warner was amazing.\nIt [AOL] was a very different culture than these brilliant and fabulously successful brands that Time Warner had that were operating mostly in silos. It was a humungous clash of centralized vs. decentralized. [...] What had happened, also, on the Time Warner side is that all of the sudden they had these AOL options in their pensions and so forth\u2026 and this is just me speaking\u2026 All the sudden, they\u2019re looking at their pensions and stock options and so forth that aren\u2019t worth what they were. And this is almost coincident with them merging with us. And so I think that there was a great feeling that if they just had stayed Time Warner, their pensions would not be worth now 50% of what they were before. You can understand where some of the angst came from.\nWe were\u2026 AOL was riding on top of the world, I\u2019m sure we had our own form of arrogance.\n"^^<http://www.w3.org/2001/XMLSchema#string>
<http://mashable.com/2014/08/21/aol-disc-marketing-jan-brandt/>