You’ve Got Revenue: Programmatic, video produces display revenue increases for AOL

“Sustained double-digit growth” in Canada outpacing U.S. counterpart Programmatic and video advertising are helping AOL achieve the type of ad revenue growth that has eluded the company for the past several years according to a new report from U.S. research firm eMarketer. The report predicts that AOL’s U.S. revenue from digital display advertising will grow […]

“Sustained double-digit growth” in Canada outpacing U.S. counterpart

Programmatic and video advertising are helping AOL achieve the type of ad revenue growth that has eluded the company for the past several years according to a new report from U.S. research firm eMarketer.

The report predicts that AOL’s U.S. revenue from digital display advertising will grow 15.5% in 2014, the company’s first double-digital growth since the recession began. The research company predicts that AOL will maintain double-digit growth through 2015 and 2016.

Dana Toering, head of sales and business development for AOL Canada in Toronto, told Marketing that the company’s Canadian growth is actually slightly outpacing that of its U.S. counterpart, mostly because it is operating from a smaller base.

Toering said that AOL Canada has seen “sustained double-digit growth” for the past four years, roughly coinciding with the 2010 arrival of country manager Graham Moysey, who is now head of AOL International, working out of London.

Toering said that AOL has made a series of “well-placed bets” in key growth areas like content (which employs more half of AOL Canada’s staff of 125) as well as programmatic buying and premium ad inventory.

The company’s Devil unit, which offers advertisers a 300 x 1050 canvas and page exclusivity, has been particularly effective, she added. “It’s been a big area of growth for us in terms of getting brand advertisers to come online and really believe in the ability of the Internet to really drive brand value,” he said.

Meanwhile, last year’s $405 million purchase of the video ad platform Adap.TV, has turned AOL into the global leader in online video advertising. Video ad growth is also being fueled by its Be On unit, which combines content production and syndication to provide advertisers with an end-to-end platform for long-form branded content (it produced and distributed Volvo Trucks’ “Epic Split” video starring Jean Claude Van Damme).

Video is one of the fast-growing areas of digital spending, with eMarketer calling for a 41% increase to US$5.9 billion this year.

From a content perspective, Toering said that AOL has been actively launching Canadian editions of popular sites such as the Huffington Post (which also launched a Quebec version in 2012) and StyleList.com. Planned additions to its content roster include a Canadian edition of its U.S. recipe site KitchenDaily.com. “We’ve really put our money where our mouth is in terms of investing in great local content,” said Toering.

Despite the turnaround however, AOL’s growth rate is well behind that of rivals like Facebook, Google and Twitter however, who are projected to see digital display revenues grow anywhere from 33% to 78% this year.

Facebook saw a 50% bump in U.S. display ad revenues in 2013, while Google’s U.S. display ad revenues were up 33.3%.

The report notes that spending on real-time bidding grew 76.5% in 2013 and will increase 43.4% to US$4.86 billion this year. eMarketer predicts that spending to increase rapidly, growing 36.6% in 2015 and 31.4% in 2016.

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