AOL Reports Ad Growth On '3rd Party' Sales, Premium Erodes

Due largely to increased sales of its inventory through third-party advertising networks and exchanges, AOL this morning reported a 5% gain in total ad sales to $330.1 million for the first quarter of 2012 versus the same period last year. The third-party sales, which now represent a third of AOL’s total ad revenue, masked significant declines in AOL’s premium display, search and contextual advertising sales during the quarter.

Coupled with the ongoing downturn in its subscription revenues, which fell another 15% during the first quarter, AOL’s total revenues declined 4% to $529.4 million during the quarter.

The decline in premium ad sales is especially vexing because AOL has made significant investments in pushing enhanced and super premium inventory, and has invested in premium content over the past year.

Domestic ad display revenue fell 1%, while international display declined 34% during the quarter. Search and contextual fell 6%.

When all display ad revenue sources -- including those from third parties, and excluding search and contextual -- are combined, AOL’s display revenues grew 10% to $240.5 million for the quarter.



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