Adapt.tv, which was acquired in August 2013, "has a growth rate north of 60%," said CFO Karen Dykstra, and was one reason for the strong revenue growth in AOL's third-party platforms business.
While AOL may have emphasized building up its content in years past, with its acquisitions of the Huffington Post, TechCrunch and Engadget, it seems the focus has shifted to the other end: ad tech and programmatic. "We have the best content on one side, with best code and ability to scale on other side," Armstrong said. Now that the company's ad technology is mostly in place, the challenge is operationalizing these functions.
Armstrong said AOL is now "one of two players with a full stack like this," a reference to Google. While many publishers have to deal with a "technology tax" that takes almost half of ad revenue away, "Our premise has been to remove that to allow value to go to supply and demand side," giving advertisers a better ROI and AOL and publisher partners better returns.
When asked about the trend of bringing programmatic buying in house, Armstrong instead focused on the different trend of agencies and brands taking ownership of their data. "Clients and agencies are getting organized around their data. You will have the largest one hundred advertisers with data solutions internally, and those will be plugged into the agency and publisher community. We're currently building our socket and plug for people to connect to our data and plug their date into our system, and we're in a strong position."
Armstrong sees the ad tech world as bracing for a wave of consolidation. "Our company’s take is that there are 200 ad tech companies, and it feels like there are going to be chairs for 25 to 30 over time. There’s going to be a wave of consolidation, in media and ad tech overall." One of those chairs, presumably, is for AOL. "If you look at our results vs. industry trends, what you see today is the new AOL. What we have built in the content business and programmatic ad tech business is something that is not replicable."