AOL is pushing to
become a dominant player in the emerging “programmatic TV” buying space, announcing yet another acquisition -- advanced TV audience targeting platform PrecisionDemand -- which will be
integrated into its Adap.tv system.
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.