Ad Buyers Warily Eye AOL-TechCrunch Drama

And right now, TechCrunch’s credibility has taken a hit. With its editorial staff in panic mode and Arrington openly warring with his bosses, the site could see its influence wane under new leadership. TechCrunch writer MG Siegler wrote that the site isn’t dependent on Arrington like a traditional editor, but at the same time he laments the site won’t be the same without him.

That’s something Kathuria wondered about. “It’s possible that this is a unique property,” he said. “Arrington is a smart guy, with a major following. We don’t know if TechrCunch loses a lot of its audience without Arrington”

Without a doubt, the astoundingly public nature of the feud — and various explanations of Arrington’s status given by AOL — will do little to reassure the ad world that AOL has its act together. After all, if Armstrong can’t manage a prominent blogger, can he lead a turnaround at AOL that’s now two and a half years in the making?

Certainly, AOL’s handing of the TechCrunch crisis is unlikely to be cited in Great Moments in PR. And AOL’s ad partners wish communications had been better in their world as well. “It would have been nice if they’d reached out to us, since we don’t really know what is going on,” said one agency executive.

But generally, buyers are willing to give TechCrunch the benefit of the doubt, considering the clout and tech cred it had built up over time.

“AOL has done the right thing in separating the editorial operations of TechCrunch from the venture fund, even if they took too long doing it and may have damaged the editorial product in the process,” said David Rittenhouse, senior partner and media director at neo@Ogilvy. “I think it sends a signal that they understand that there should be a meaningful difference between those two lines of business. From my perspective, I don’t believe most of advertisers would make sudden moves either toward or away from TechCrunch because the underlying fundamentals — like audience size and type, price of advertising, even editorial quality and rage of coverage — shouldn’t change overnight because Michael Arrington took on a new post at AOL.”

In other words, a big audience of passionate, engaged users who fit into a certain desirable technophile demo will trump controversy — most times.

“In a highly competitive market with very few secrets, consumers will vote with their mouse if they think TechCrunch’s coverage becomes biased,” said Bryan Wiener, CEO, digital agency 360i. “And advertisers follow engaged eyeballs.“