AOL's Armstrong: We'll Get Deeper Into The Exchange Space In 2012

AOL's advertising is mostly known for its ad network and targeting tools, but in contrast to rivals Yahoo, Microsoft and Google, it has not been deeply immersed in the ad exchange space. During the company's Q4 earnings call, AOL CEO Tim Armstrong told investors that AOL plans to roll out several products around audience buying and data this year, while keeping its focus on partnerships with the major ad holding companies.

Armstrong didn't provide specifics during a follow-up call with the press. "We have a series of products around the ad exchange space coming out this year," he said. "In fact one is being beta tested right now with a partner. It is designed to help the ad exchanges and players in that space, as well as offer another version of non-reserved inventory for them. We’ll go into more detail this quarter."

Armstrong also pointed to some other longer-term products that will be released within the next six months and through the latter part of the year. "All I can say right now is that I’ve been reviewing them and they will serve as good augments to what’s currently in the market," he said.

For the most part, the closest thing AOL has done in terms of working with third parties in the ad exchange and demand-side platform space has been with Publicis Group's digital hub, VivaKi. That work mostly revolves around video, Armstrong said, though he plans to expand that partnership with that agency unit.

Although normally very acquisitive, AOL hasn't bought anything in the past few years that would be directly related to the rise of exchanges. Instead it has concentrated on content (Techcrunch and almost a year ago, The Huffington Post) or tools designed to enhance its ability to create premium ad units (Pictela, the developer of AOL's Project Devil brand display units) or StudioNow and goviral, which are centered around video.

In contrast, last fall, Yahoo  bought data management platform interclick for $270 million, even while it was in the midst of some turmoil around the departure of Carol Bartz as CEO.

Some DSPs have felt shut out by AOL's choice of limiting their partnerships on data with companies like VivaKi. In essence, Armstrong's comments suggest AOL will continue to work on its own DSP-like products, such as Advertising.com targeting tool AdLearn and Germany's AdTech, which also falls on the programmatic buying side.

"We have a very big advantage both in the ad network and exchange spaces because of the machine-learning we have with Advertising.com, and the ad format work we’ve been doing," Armstrong said during the press call. "You can think of us as the Goldman, Sachs type player on top of the exchanges. We’ve spent a lot of time, energy and technology on figuring out the value of individual things being traded. We have a proprietary set of technologies. That’s why you’re seeing growth in our network business."

By David Kaplan

1 Comment

  1. Jimmy Bogroff

    Ironic that Yahoo! is trying to keep more inventory out of the secondary markets, and AOL's strategy is to try to push more to exchanges.

    Reply

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