Sunday, September 29, 2013

AOL trying to be relevat

AOL recently announced that they have just sealed web advertising deals with ad agencies including Omnicom Group's Accuen, Amnet, Havas SA's Havas Media, Horizon Media and Interpublic Group to buy more online ads from AOL. The majority of the advertiser's spend from these deals are digging into the pots of TV advertising budgets to fund it. This is a big shift since these media agencies have traditionally kept budgets on TV advertising rather silo-ed and separate from web advertising. AOL has enticed them by allowing Ad Agencies to use AOL's innovative Ad Exchange to pick and target key demographics and large online audiences--the type of direct advertising that agencies want.

AOL is doing their best to draw money away from traditional TV advertising budgets and to have media buying agencies to put their money on the next wave of products that will likely have better reach than TV. This includes mobile and tablets. AOL, traditionally known as an Internet Service Provider, sees more relevance growing in the Ad space and utilizing their exchange service to increase revenues. It will be interesting to see when media spend on the web starts to outspend media spend on TV, especially as VOD and online TV becomes the apparent go-to-method for the hot new shows. I give it about 2-3 years where the $2.9 Billion of web spend reaches the level of TV spend (currently at ~$65 billion).

http://online.wsj.com/article/SB10001424052702303983904579093651838913202.html

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