The deal is significant for several reasons, including the fact that PrecisionDemand owns key patents for TV ad targeting, but also because it pushes AOL more deeply into access of conventional “‘linear” TV advertising inventory.
PrecisionDemand, which had been headed by former long-time Madison Avenue media honcho Jon Mandel, is one of several start-ups and more established researchers that are utilizing Big Data to refine the way advertisers and agencies target TV advertising inventory -- based more on the actual audiences they are delivering than on using programs as a proxy for reaching them. By matching a client’s own first-party data, with various third-party data sources and linking it to census-level TV audience data from digital set-top devices, these players claim they can target TV audiences with a precision not previously feasible on Madison Avenue.
Importantly, the ability to target specific audiences plays directly into Madison Avenue’s shift from “media-buying” to “audience-buying,” and facilitates a marketplace where TV audiences can be planned, bought and sold alongside digital audience inventory on programmatic trading systems used by advertisers, agencies and agency trading desks.
AOL acquired Adap.tv, a company that was already moving in that direction, last year for $405 million, and subsequently announced a deal with Interpublic’s Mediabrands’ Magna Global unit to make it a cornerstone of its TV audience-buying platform.
Mediabrands is one of the most aggressive agencies pushing the transition to programmatic and has set a goal that 50% of all its media will be bought via automation systems by 2017.
“With PrecisionDemand now on board at AOL, we are greatly accelerating our efforts in creating the platforms needed to manage today’s multiscreen video world, through Adap.tv today, and soon through ONE by AOL,” Toby Gabriner, CEO of Adap.tv, said in a blog post announcing the deal. “The opportunity here is immense; we at AOL have built and collected the assets to take advantage of it, and I am excited by the challenge of unlocking our potential.”
He said the integration would enable advertisers and agencies to connect “consumer purchases back to specific TV ad buys, not just the usual media mix modeling that is used today.”
Terms of the deal were not disclosed, but PrecisionDemand had been known to be struggling to develop a revenue stream and some of its investors were eager to exit.
To date, it had raised $18 million from Rho Ventures, StarVest and OVP.