OK, it's an awkward term. The goal is to replace the concept of usability. Or, rather, to supersede it. Audience Experience Optimization is a discipline that seeks to make certain that a viewer/participant of a Web site has a satisfying experience.
Traditional usability studies are effective, but limited in scope. They focus strictly on how "functional" an application is. Specifically, they determine whether a user can complete a strict series of tasks. I think this model is outdated and doesn't apply well to the Web.
Not too long ago, it was uncommon to talk about custom Web applications. Only a few years ago, the Web application world was dominated by packages—installable applications that had to be customized, integrated, and adapted to the client's needs. Thankfully, those days are over.