AOL's Free CD Campaign Was Anything But Cheap

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AOL's Free CD Campaign Was Anything But Cheap

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It turns out that AOL spent a lot of money to send you all those free CDs over the years.

Remember how, all the way through the 1990s, America Online bombarded the general public with tons of free CDs promoting its service? My friends and I sure do, as we would often thank AOL for providing us with an enormous set of free coasters for our apartments. It turns out that AOL spent a lot of money on that marketing campaign, which (for a while) was incredibly effective at getting people to subscribe.

A question on Quora.com asked how much AOL spent on the campaign, and former CEO Steve Case was one of the many folks who contributed to the answer. According to Chase, the cost was so great that it equated to spending $35 for each subscriber the service received:

I don't remember the total spending but do recall in the early 1990s our target was to spend 10% of lifetime revenue to get a new subscriber. At that time I believe the average subscriber life was about 25 months and revenue was about $350 so we spent about $35 to acquire subscribers. As we were able to lower the cost of disks/trial/etc we were able to ramp up marketing. (Plus, we knew Microsoft was coming and it was never going to be easier or cheaper to get market share.) When we went public in 1992 we had less than 200,000 subscribers; a decade later the number was in the 25 million range. That helped drive our market capitalization up from $70 million at the time of the IPO to $150 billion when we decided to combine with Time Warner to accelerate our transition to broadband and diversify our revenue mix.

For a while, a lot of people were subscribing with America Online. At one point, the number of total subscribers was reported at roughly 30 million (a bit higher than Case's estimate), though it's dropped a bit since then. As of June 2010, AOL reports that it has about 4.4 million subscribers. Sounds like AOL's marketing department needs to come up with a similar program to get the numbers back up ...

Source: Quora via Geek

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I don't think anyone thinks it was cheap, just that it was stupid.

Heh.

I remember how my grandparents got quite confused (and a little incensed) when I tried to throw one of those discs out, claiming that they were raised to never turn their backs on something free.

UltimatheChosen:
Heh.

I remember how my grandparents got quite confused (and a little incensed) when I tried to throw one of those discs out, claiming that they were raised to never turn their backs on something free.

How many of those "YOU'RE THE MILLIONTH VISITOR!" scams have they fell for?

Nothing is free, especially in this day and age.

Send out AOL on free flash drives! Sure it's probably more expensive for them than CDs, but at least those of us on the receiving end can format the suckers and get some use out of them other than free coasters. :p

Hmm, perhaps if AOL hadn't started behaving like an extortion racket, they would still have a few more subscribers.

Although AOL: Subscribe or suffer the consequence would make a brilliant spoof.

I will give them props for getting the internet started. I didn't really know much about the internet until I got one of those disks. Also, that "you've got mail" sound effect became so iconic for a while.

Wow, all that money to give people free coasters.

danpascooch:
I don't think anyone thinks it was cheap, just that it was stupid.

Yeah it just made them billionaires, I bet he's feeling real stupid right about now .

Gosh, reminds me of how annoyed I was when they switched from floppies to CDs. Free, easily-formatted floppy disks were a godsend to my geeky little self, always in need of boot disks.

mjc0961:
Send out AOL on free flash drives! Sure it's probably more expensive for them than CDs, but at least those of us on the receiving end can format the suckers and get some use out of them other than free coasters. :p

I hardly think you'd be able to use a 32mb flash drive for anything useful these days.
But if you could get a hold of a lot of them, you could use a filesplitter and make a datachain, or memory jenga!

Oh I remember those things... AOL pretty much got my undying hatred because of those frigging things kept showing up in the mail and in my game mags sometimes.

I had very limited access to a phone line, and no way to get broadband while in the dorms during Tech School for US Air Force. I had a little over a month left at Lackland AFB and figured what the hell, free dial up.

I canceled before I left and figured that was that. Someone down at AOL decided their numbers where not good enough when I called and marked me as a "save" not canceling my service.

Seeing how I shipped off to Ft. Gordon right after that I had no way of knowing until I finally got a statement sent to me three months later that AOL had charged my card four times. The real kicker came when the third time I called the lady finally canceled my service, and gave me a month free to "make up" for the mistake, but also neglected to cancel the service so after that month they charged me yet again. I finally contacted my bank, and the lady I talked to said they had heard the same story multiple times. They did a charge back on all but one of the five charges AOL had placed against my account. That charge AOL refunded on their own.

AOL would likely be dust now if they hadn't merged with Time Warner.

Huh, maybe I shouldn't have been smashing those discs with a baseball bat after all.

Thank you AOL. They were GREAT for Skeet Shooting.

Maybe if your service did not SUCK so much......

lol i still have my AOL CD kicking about somewhere, aswell as my NTL CD

Protip: Those CD's make awesome frisbees which make cats go fucking insane when they see them flying by.

mjc0961:
Send out AOL on free flash drives! Sure it's probably more expensive for them than CDs, but at least those of us on the receiving end can format the suckers and get some use out of them other than free coasters. :p

You can get bulk-rate USB drives for around $4.50 a pop at their cheapest (that's for 256MB, though, and I don't think ANYTHING has an installation program that small these days). Still, it's not outside the realm of possibility.

What is outside the realm of possibility, however, is that enough people to make it all worthwhile would want to go back to a company whose own broadband president had once declared that "narrowband will be around forever" (she certainly wasn't; she got fired two years later), which accidentally publically posted search results input by 650,000 users... along with their account numbers (which proved to be personally identifiable via cross-referencing), and which has cost Time Warner millions of dollars since the merger.

If we're going to be dragging relics from the 90s back... personally, I'd rather have POGs. Or at least Trapper Keepers.

I remember making hundreds of "ninja stars" out of those disks. Fun times!

So... maybe to get back to thier roots, AOL should send out 3G USB drives in the mail with two months free broadband?

edit: heh, guess I'm not the only one with the same idea.

LegendaryGamer0:
Protip: Those CD's make awesome frisbees which make cats go fucking insane when they see them flying by.

Good to know for my upcoming weekly trips to the pet park >:]

LightOfDarkness:

LegendaryGamer0:
Protip: Those CD's make awesome frisbees which make cats go fucking insane when they see them flying by.

Good to know for my upcoming weekly trips to the pet park >:]

Hell, you want a few thousand of mine? I'll leave them under the tree at midnight in the park...

Be sure to attach mini strobe lights.

Maybe there new marketing campaign should be covertly making their service even discernably competant, and "leak" that an AOL connection is actually worth the money and isn't an unreliable, restrictive, pathetic bandwidth, slow scam anymore. My parents set up our internet connection 6 years ago (I spent 6 prior trying to get it) and they chose AOL based on the fact my grandparents had it. It was then bought by Carphone Warehouse and became inexplicably awful in every respect. Very rarely is it fast enough to stream a video on youtube at the lowest resolution without a 10 second per second of video, wait.

I preferred it when they sent out the venerable and ancient 3.5" disks in the beginning. I can't tell you the number of uses I got out of those for extra backups, sneaker net trading of various things found on BBSes, boot disks, you name it. They probably weren't the highest quality of media, but they were free.

The main problem with this AOL marketing campaign was that when people had signed up to a 12 month contract, they invariably had 12 months of internet access to find a company that didn't suck donkey balls. 12 months to find out that there was a whole world of internet that wasn't slow with frequent disconnects, but in fact, reliable, enjoyable, fast and fun.

I'm speaking of AOL UK who, to be fair, WERE unbelievably shit, but then sold their UK arm to Carphone Whorehouse and actually managed to get worse.

I had to lie to my own parents to get them to let go of AOL, despite it being a bloody awful service, telling them that they'd get to keep their AOL email address (which is now spamming her new address, amusingly.) Even that wasn't enough, it was a high pressure sales call from an indian call centre that made my dad lose his rag, where they effectively told him that if he didn't sign up on the spot for a new 24 month contract he'd be cut off that day.

Hell, it might even have been a scam call and not from AOL, I don't care, I just know I've got my parents away from 'up to 1mb broadband' for £18 a month, to nearer 8mb from BE for £7.50, and it's far more reliable and doesn't come with a disc full of free shite to clog up their pc.

Hmm, I remember throwing some of those free CDs about. Was pretty fun!

megs1120:
Gosh, reminds me of how annoyed I was when they switched from floppies to CDs. Free, easily-formatted floppy disks were a godsend to my geeky little self, always in need of boot disks.

First thing I thought of, too. The CDs were just annoying to have to throw out, but getting free floppies in the mail every few weeks was awesome. Or being That Guy who'd go into a store and grab several of the ones they were giving out for free by the door/registers...or like some less subtle people I knew, swiping the entire display and getting what amounted to a free case of disks. Hard to argue with 60MB of free disk space when you only have a 40MB hard drive to begin with. Heh.

Too bad it was a terrible service that was crushed once something half decent came along.

There is no such thing as a free lunch. Somebody, somewhere, has to pay for it in some way.

Ah to live in those simple and bountiful times again, when people could complain about too much free Internet.

Nalgas D. Lemur:

megs1120:
Gosh, reminds me of how annoyed I was when they switched from floppies to CDs. Free, easily-formatted floppy disks were a godsend to my geeky little self, always in need of boot disks.

First thing I thought of, too. The CDs were just annoying to have to throw out, but getting free floppies in the mail every few weeks was awesome. Or being That Guy who'd go into a store and grab several of the ones they were giving out for free by the door/registers...or like some less subtle people I knew, swiping the entire display and getting what amounted to a free case of disks. Hard to argue with 60MB of free disk space when you only have a 40MB hard drive to begin with. Heh.

Hahaha, good times.

Snail Mail Spam. I remember reading about one guy who saved hundreds of disks and then mailed them back.

danpascooch:

UltimatheChosen:
Heh.

I remember how my grandparents got quite confused (and a little incensed) when I tried to throw one of those discs out, claiming that they were raised to never turn their backs on something free.

How many of those "YOU'RE THE MILLIONTH VISITOR!" scams have they fell for?

Nothing is free, especially in this day and age.

None.

They're actually pretty saavy, they just didn't understand that AOL was worthless.

UltimatheChosen:
Heh.

I remember how my grandparents got quite confused (and a little incensed) when I tried to throw one of those discs out, claiming that they were raised to never turn their backs on something free.

Send 'em to the local community college for Econ 101. After a quick course in economics they'll trade their platitude for a chant of "there ain't no such thing as a free lunch" (or TANSTAAFL, the "abracadabra" of the economist).

Oh god, I remember in high school, my friends parents couldn't afford internet(or they thought he was too addicted to it), so he swiped a bunch of those free disks and used free AOL for an entire year. We use to collect them for him when ever I passed by a rack of them.

"You've got mail!" anyone?

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