AOL launches new platform for buying advertising across media

AOL has unveiled a new platform for buying advertising across different media, as the internet company positions itself to ride the near-$600bn global ad industry's shift into a data-driven, automated future.

The platform called One by AOL will unite the company's ad technologies into a single system to allow advertisers to buy, sell and measure performance on television, social media, mobile, websites and digital video, rather than having to use a disparate set of tools.

"One allows advertisers and agencies to use data as the foundation of their marketing strategy, looking at consumers through a single, media-agnostic lens, from web to TV," said Bob Lord, AOL president.

AOL's push comes as technological change is reshaping the way ads are bought, sold and created. Marketers are turning to algorithm-based technologies to target consumers and buy inventory, sometimes in real time.

Enormous volumes of data from online profiles, set-top TV boxes, credit card purchases, and retailers' loyalty card programmes allow advertisers to target messages at specific people at the moment they are most receptive.

Such programmatic, or automated, buying is capturing a growing share of ad budgets. Some $53bn will be spent globally on ads bought and sold programmatically by 2018, up from $21bn in 2014, according to Magna Global, Interpublic's media buying and research group.

AOL has invested heavily in programmatic buying in recent years as Tim Armstrong, chief executive, has sought to transform the New York-based company into an advertising powerhouse. Programmatic revenue increased 250 per cent last year to make up 40 per cent of AOL's non-search ad sales.

In the US digital display advertising market, programmatic already accounts for more than half of spending and will expand to 63 per cent in 2016, according to eMarketer, the researcher. It is projected to increase its share of digital video ad budgets from 28 per cent to 40 per cent next year. Programmatic spending on mobile platforms will overtake desktop computers this year.

Ad technology groups have their sights on the $70bn US TV advertising business. TV spots still account for the biggest portion of ad budgets, but with ratings eroding in the face of competition from Netflix, YouTube and other online services, networks and marketers are looking for new ways to value commercial inventory.

AOL says advertisers will be able to use its new platform to match data on who is watching through set-top boxes to viewers' online identities, in order to highlight the TV inventory that would be seen by likely customers. They can then evaluate how dollars spent in TV affect business outcomes, such as sales, compared with dollars spent on search ads or social media campaigns.

"Being able to plan, reach, engage with and measure audiences across the myriad of channels and screens our customers live on is key," said Cathleen Ryan, director of marketing at Intuit, the accounting software company, which is an AOL client.

AOL says its unified platform will reduce the "technology tax" in digital ads, which it estimates results in 75 cents of every dollar spent going to technology rather than the publisher or network that owns the advertising inventory.

The company is also emphasising to brands that they can bring their own data to, and take data out of, its open platform and that they can pick and choose which parts of the service they use.

That is in contrast to Facebook and Google, whose advertising platforms restrict clients' ability to bring in third-party data or use Facebook and Google data on other platforms.

"The walled garden strategy is not going to win with the largest global brands and agencies, which is where we want to play," said Seth Demsey, chief technical officer for AOL Platforms.

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