AOL Q2 Earnings: Ad Tech, Programmatic Still At Forefront

AOL on Wednesday released its Q2 2014 results, and once again programmatic was a large part of the story.

AOL Platforms -- the division which houses the company’s ad tech stack -- accounted for $247.1 million in revenue in the second quarter, up 54% year-over-year. In fact, at this time last year, Membership Group and Brand Group accounted for more revenue than the Platforms unit, but now the ad tech business is AOL's main revenue driver, with programmatic at the forefront.

“In Q2 2014, 34% of our advertising business was programmatic versus less than 5% a year ago,” Tim Armstrong, CEO and chairman of AOL, told Real-Time Daily.

Overall, the company’s total revenue grew 12% year-over-year, totaling $606.8 million last quarter.

Excluding Adap.tv -- the programmatic video ad platform AOL acquired one year ago for over $400 million -- the Platforms unit still saw 20% year-over-year revenue growth, which AOL attributes to “growth in sale of premium formats across AOL’s programmatic platform.”

“AOL's future as a scaled media technology company continues to get stronger. AOL grew consumer usage, video, programmatic advertising, branded content, and ad pricing throughout the first half of 2014,” Armstrong said in an earlier statement.

The company had previously noted that programmatic advertising was one of the largest reasons 2013 was AOL’s most successful year in a decade, and ad tech was once again highlighted in the company's Q1 2014 earnings report.

AOL has been intentional about building out its Platforms unit, too, setting itself up for continued growth via programmatic advertising. The company recently acquired attribution modeling platform Convertro and TV audience targeting platform PrecisionDemand as it gears up to launch a revamped programmatic buying platform featuring its entire tech stack, dubbed ONE. In other words, AOL is doing what it can to make sure programmatic's importance to the company is not a flash in the pan.

“For the second half of the year in the platforms area, [the plan is] to continue to scale our complete programmatic advertising stack called ONE by AOL,” Armstrong told Real-Time Daily. “We recently announced the addition of Havas global digital agency to the customer list of ONE … and added significant assets to our strategy with the acquisitions of Convertro and PrecisionDemand.”

Armstong added that PrecisonDemand will open up Adap.tv and the ONE platform to linear TV advertising via programmatic, and that Convertro will “reshape the measurement of omni-channel advertising.”

Following the Q2 earnings report, shares of AOL jumped over 7% in price.

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