After steadily building up an arsenal of ad-tech software, AOL is now planning to integrate its products into a single platform, called One by AOL, the company announced today.
For AOL, the move is driven by a desire to position itself as a simpler ad-tech solution amidst an ecosystem that can be bafflingly complex. Companies buying and selling ad inventory through ad-tech often rely on multiple products along each step of the chain, generating problems such as data loss and tedious cookie syncing. Many opt for this complexity intentionally -- working across multiple platforms allows them to identify which one is performing best and then later shift more money in its direction -- but AOL is betting the benefits of minimizing the complications outweigh the drawbacks.
"We are eliminating all of that inefficiency," said Bob Lord, CEO of AOL Platforms, formerly AOL Networks, which was renamed today as well. "And then on the backside of it, we're collecting the data so the data can be used for retargeting and optimization."
In One, AOL will centralize not only the tech it built, but its acquired technology too, including the programmatic video exchange Adap.tv. The new platform, Mr. Lord said, will have a single user interface, and the individual names of AOL's software products will eventually be retired, as they will all be encompassed under the One umbrella.
"What we're saying with One is we're basically bringing this whole ecosystem together for you," Mr. Lord said.
Centralizing data is a major component to the initiative. AOL believes it will not only minimize data loss, but help buyers optimize cross-media ad spend. "I'm sitting in the CMO's shoes, I want to know 'Did my money actually have an impact?'" said Mr. Lord. "The only way you're going to do that is when you actually pull in all the pieces together and look at them holistically, and that's the ambition of One."
The data centralization capabilities, Mr. Lord said, should be built by late spring or early summer. And a common user interface is planned for the end of the year.
Mr. Lord said he also hopes to bring down the advertising "tech tax" to as little as 25 cents on every dollar spent through One. Today, AOL believes the ad-tech ecosystem siphons out anywhere from 55 cents to over 75 cents on the dollar. "If you ever get into a brand advertiser, you will find out that they have three DMPs, that they have four retargeting systems," Mr. Lord said. The consolidation, he said, should eliminate the need to pay so many companies for similar actions.
$43.6B U.S. agency revenue
EMarketer analyst Lauren Fisher said the move should help AOL's business. "What we're seeing with programmatic is this desire to have something that is a little more integrated," she said. "It's reflective of the broader industry trend."
And an analyst report from Jeffries released today expressed similar optimism. AOL, it said, has "a first mover advantage in being a one-stop shop for advertisers, vs. nascent players that cater to disparate parts of the value chain."
"We believe that AOL Networks' suite of programmatic assets, which is complementary to the owned and operated properties, is a competitive advantage for the company when it comes to attracting advertisers as well as publishers," the report added.
IPG Mediabrands investment arm
Mr. Lord wouldn't comment on Magna's spending commitment through One, but said: "They're a $37 billion dollar buyer and 50% of their spend is going to go through programmatic. Even if AOL is a small percentage of that buy overall, it's a pretty big number."