Brody sat down with AdExchanger.com and discussed Aol Advertising strategy and momentum.
AdExchanger.com: Can you update us on the latest regarding Aol's technology stack strategy?
NB: The first time we sat down, I said that Aol will be focused on providing a technology stack that will allow everyone to play - from the SSP (sell-side platform) all the way through the DSP (demand-side platform) market. We're actively executing on that strategy today.
And, one of the first things you'll see from us is something called AdLearn Open Platform. AdLearn Open Platform is a DSP product that takes the UI of a DSP and allows companies that want to participate to both bid into Aol's inventory as well as all the other inventory sources in the marketplace.
It offers the capabilities of AdLearn from an optimization perspective - AdLearn being our core decisioning engine that drives, frankly, all the benefit and profitability that the ad.com display business gets. So, we're bringing just a little bit more to the market than you might commonly see in a DSP. It's really a DSP plus optimization, plus the inventory and opportunity to participate.
You'll also see us starting to work more upstream from where we sit with ad tech. We're more on the pre‑exchange model compared to where SSPs, optimizers, etc., are. We'll play in that market more and more in the next couple of months. When you look at the mission of companies like AdMeld, Rubicon Project, OpenX, you'll see us having offerings in those markets, too.
I'm curious about ad.com – is it morphing as an ad network, away from the publisher network, and starting to take advantage of the exchange model?
Well, I wouldn't say ad.com is moving away from the publisher model. The vast majority of our inventory still is from 4500 publishers that we typically buy in advance and on a non‑reserved basis. We have long-term contracts with many of those companies and have 10 years of experience with them. That experience helps us drive what inventory is terrific for us to buy, and which inventory we shouldn't be buying from them. We're able to supplement that because of our infrastructure, to do approximately two billion auctions a day, where we're bidding on or deciding upon what inventory to buy. That has allowed us to both work with those 4500 publishers and also buy on the exchange. The vast majority is still on the publisher side, but we have the technology to play both. I think we're well positioned there.
Regarding DSPs, a lot of people have been predicting the demise of the ad networks. But I think you saw it in our Q2 earnings. Our ad network business had one of the best growth rates that it's had in a very long time. So, it might have been a little early to predict the decline of that business.
Touching again on the DSP, who's the right client for this new DSP product? And will existing DSPs out there be allowed to use the product?
We won't be having other DSPs bid into our DSP. We will have holding companies, large advertisers, trading desks – those types of customers will be coming through the AdLearn Open Platform.
So, in terms of other DSPs and ad networks, etc., there's no access to AOL non‑guaranteed inventory available to them yet.
Where does Huffington Post fit in here? Under the ad.com umbrella?
First, it's very much a part of the AOL product line. It carries a separate consumer brand. It is sold in conjunction with all the other brands – Stylelist, Engadget, TechCrunch, etc. All are different parts of the AOL opportunity.
At the end of the day, it's about audience and products to access those audiences. Some of them, like Stylelist, are highly endemic audiences, where if you want to reach women, that works. On the Huffington Post, it's the most socially engaged product that we've got. So for highly socially engaged consumers that you want to reach, the Huffington Post is a great play. If you want to reach 13 million people a day, buy on the home page.
In July, we were able to transition the Huffington Post inventory onto our ADTECH serving systems, so now it is just another type of product that we can sell from a technical perspective.
And the salesforces have been combined and are selling them both in combination packages as well as just discrete offerings to the marketplace.
Video appears to be ramping. What's your view on online video advertising and the market today?
Look… offline advertising has yet to make its way online. It's moving over to digital, but… why is that rate of transfer X instead of 2X or 3X? I think you have to look at simple ideas such as - it's pretty hard to convince an advertiser who is used to 15, 30, and 60 second commercials that something that gets .02% click through and is 728 by 90 in size is really the same thing.
The more you can make those formats resemble what advertisers are used to in the offline world, the better you will be able at converting those dollars to digital. That's why we have such an investment in things like premium formats. Pictela, Project Devil, and video advertising itself.
But, at certain agencies or advertisers, the same people who book the television are [starting to book] the video online - as opposed to the separation of offline and digital budget line. I think you're seeing that as a driver of growth.
We've seen high increased demand for video. We are there with video content and our syndication businesses with 5Min and GoViral.
You've seen our recent move to cross sell StudioNow and 5Min and GoViral both in Europe and here. Our European management is going to be running both products in Europe. Our American management is going to run both products here. And then we can syndicate and monetize the 5min video assets.
We have a complete video offering that spans that full spectrum and we fully intend to be clear to and competitive in the marketplace on video.
You may have heard this criticism that "Ned's not an agency guy" when you were first hired for the top sales job. What was your reaction to that?
Well, first of all, I don't think it was criticism. I think it was more an observation. I read the press ‑ people can say a lot worse about people.
I think what they were trying to say was that "Ned has not been out selling for 25 years, and so we don't know him as well." I think for me it's an opportunity, and when you're not as well-known as some people are, you probably have the ability to bring something in that's a little different to change things. You have license to be different, and I don't think that's a bad thing. I'd much rather frankly be known for having an effect than for being known for my history. And that's what I hope to do.
So about the Yahoo, Microsoft, AOL partnership that everybody talks about, are you ready to announce it?
No. But, what I would say is that we are partners with a lot of companies in the marketplace including Yahoo and Microsoft. We're continuing to look for ways to evolve those partnerships with creative products that can meet advertisers and agencies needs. What people saw was the first rendition of what some of those products might look like, and when there's something to announce we'll announce it, but we're excited to broaden our depth of relationship with all of our major partners.
What are the next steps internationally, particularly in Europe? Can you talk a bit more about that?
So we've done a bunch of things. One is we've solidified the organizational structure in Europe only two weeks ago.
We are focusing on two businesses distinctly. One is the network business, and we define network as all of our network businesses - so GoViral, 5min, Ad.com, ADTECH, all those in one group with a new leader under that who's Rene Rechtman. And then there's the O&O Huffington Post media group side with a new leader there, Jimmy Maymann.
Both of those were announced a couple weeks ago. Their jobs are to rebuild and re-enter the markets in Europe. You also saw the first announcement of Huffington Post or Le Huffington Post which is a joint venture which will be launched fairly soon on the O&O Huffington Post media side. That's the first new real launch you've seen in Europe.
Also, on the European side we have operating businesses with GoViral and Ad.com and ADTECH of course. We are bringing over 5min products and in combination with the other products, you will see a re-launch in European markets over the next 12 months.
We have a list of countries. We know where we're going, and you should see us continue to march down those roads. But we are very much actively re-investing in Europe.
On the programmatic buying side… is there something that AOL is doing to try to speak to that programmatic buying interest that exists in Europe today?
So we have a couple of big assets in Europe. Number one is the ADTECH asset base which has a large number of top European publishers as customers. How they're inventoried on a non‑reserved basis and how it gets monetized - we have not had a strong "say" in that historically. But, if you were to have a product, that asset base is one that's very valuable and could be leveraged into optimization/SSP relationships where you're helping influence how the supply meets the market. This is a key part of our re-entry expansion.
Display, video, mobile… the ideal here in digital and audience buying is that all of these channels can be understood and offer a better understanding of ad spend attribution to the marketer. Is that starting to bleed into how you think about a selling strategy?
First, there are a lot of big questions about whether you should have specialist salesforces or combined salesforces. Everyone in the marketplace does it differently. For us, it comes down to: "How do you ensure you have the best expert in the room for the products that an advertiser/agency wants to buy?" We've tried different ways. We're continuing to evolve those.
When you're talking about extremes like network versus O&O, the network mathematics are very different than O&O mathematics. What appeals to a performance advertiser versus a brand advertiser is very different.
We're actively looking at it all and we think we've got the right mix right now.
Finally, is AOL in the market to acquire technology?
Obviously, I can never comment about a specific acquisition or even a category of acquisitions. AOL actively looks at the market. We have been an active acquirer over the years and will continue to look for opportunities. We've made our decisions on how we're approaching our tech stack and content. We've been executing our strategy.
By John Ebbert