NEW YORK (CNN/Money) -
America Online will begin offering advertisers space on the "Welcome Screen" that greets its 35 million users when they log on with the No. 1 Internet service provider, according to a published report Friday.
AOL is turning to the new strategy in an effort to boost its advertising revenue, which plunged 40 percent to $1.6 billion in 2002 and is expected to fall another 40-to-50 percent in 2003.
The division of AOL Time Warner (AOL: unchanged at $10.56, Research, Estimates), the parent company of CNN/Money, said last month that its subscriber base shrank for the first time in the fourth quarter, and in a move to retain users, eliminated pop-up ads in October.
America Online said the ads on the "Welcome Screen" will start running regularly next month and will take up about 10 percent of the screen. It will also run advertisements on the signoff screen and next to search results, according to the Wall Street Journal.
A spokesman for AOL, Lon Otremba, told the paper the firm had to start offering the high-profile placements to stay competitive with competitors such as Yahoo! and Microsoft's MSN. "Marketers were coming to us and constantly saying 'You didn't get part of this buy because I couldn't get on the Welcome Screen."
One of the first firms to buy a Welcome Screen spot when America Online decided to test the concept was Weight Watchers International's WeighWatchers.com unit, which ran two ads in the first week in February. The company's chief marketing officer told the Journal the ads provided a "lift in sales."
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