AOL's Best Year In A Decade Fueled By Programmatic

2013 was AOL's best year in the last decade, according to Tim Armstrong, chairman and CEO, and programmatic played no small part.

Per its Q4 earnings report, the company's global advertising revenue grew by 23% year-over-year, up to $507 million. The company cites a 63% growth in third-party network revenue on the year, "driven by growth in the sale of premium formats across AOL's programmatic platform and by the inclusion of revenue from Adap.tv."

AOL acquired Adap.tv, a programmatic video ad platform, in August 2013 for $405 million. The acquisition played a huge role in AOL's third-party network revenue growth, but AOL had success in this area on its own; the company said its third-party network revenue grew 20% when excluding Adap.tv.

AOL Networks, the company's division that positions itself at "the intersection of premium and programmatic," saw its revenue increase 50% year-over-year. AOL attributed this growth to "video, mobile and programmatic." Like the company's overall ad revenue, AOL Networks' growth was driven in large part by the Adap.tv acquisition.

However, AOL Networks' was "negatively impacted by the divestiture of StudioNow in Q1 2013," as StudioNow contributed $1.4 million in revenue to AOL Networks in Q4 2012, per the release.

AOL Networks' Adjusted OIBDA (operating income before depreciation and amortization) declined $0.5 million year-over-year because of the company's increased focus on programmatic platforms and premium inventory, per the release.

The acquisition of Adap.tv was AOL's most significant power play in the programmatic arena in 2013, but it was not the only time the company shared headlines with ad technology. In addition to the Adap.tv deal, AOL hosted the first ever "Programmatic Upfront" in the fall of 2013. The company also struck an agreement with Yahoo and Microsoft to standardize "programmatic premium APIs," making it easier for premium inventory to be bought and sold via programmatic means.

Programmatic was a clear area of focus for AOL in 2013, and it figures to be once again in 2014. Armstrong stated, "AOL plans to invest in our market leading strategies in 2014, while we continue to grow the company."
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