Sponsor Content Above the Clutter with Pete Krainik
Episode Seven: Man And Machine
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The company said on Thursday that half of its U.S. NewFronts original video slate -- eight of 16 shows -- have been sold, double the four it announced in April. AOL also named Marta Martinez as head of global video ad sales, a position that had been vacant since Charles Gabriel departed last month. Two weeks ago the video division received two Emmy nominations.
"More will be sold," AOL video president Ran Harnevo said of the company's NewFronts offerings. "We're negotiating a bunch of others."
Mr. Harnevo declined to offer details on the size of the NewFronts deals, but said they were "meaningful" for the company.
Under CEO Tim Armstrong, AOL has staked its future on three pillars: premium content, video and advertising technology. With investments in those three businesses, Mr. Armstrong is hoping to keep the company sustainable when its still sizable subscription business eventually peters out.
Nearly all of AOL's growth is coming from its ad-tech and video businesses, which the company includes within its Platforms group. In the first quarter of this year, AOL reported that revenue from its Platforms group increased 43% compared to a decrease of 6% in its brands group, where premium content sits.
The video business is especially important to AOL because of its ability to scale. AOL offers a video player that it programs and publishers can embed on their websites. AOL then generates revenue from the ads served through its player, which is currently used on 2,500 sites, including USA Today and Spin.
To date, AOL has sold "Cityballet" to Citi; "Connected" to Sprint; "My Hero" to Digitas; and "HardWired," "The Future Starts Here," and "Making a Scene with James Franco" to Verizon. It also sold "Laugh Lessons" and one more show to sponsors it declined to name due to pending announcements. (Related: AOL Bets On More Short Series, and Steve Buscemi)
Mr. Harnevo said each deal is packaged with agreements for the advertiser to buy more than just the sponsorship of the show. "TV does the same. When you buy primetime, you buy a package," he said. AOL's deals often include agreements to purchase more of the company's video inventory, Mr. Harnevo said.
"That's a part of the strategy in investing in premium content," he said. "When the advertisers are coming to work with us, we try to make them invest in the whole business."
Advertisers view primetime TV and online video very differently, however. While primetime TV inventory is considered scarce, many advertisers believe there's little need to commit dollars upfront to digital video due to the vast quantities of inventory that can be purchased across the internet.
Making the case for premium online video will be the prime responsibility for Ms. Martinez, previously head of sales, strategy and operations. "The strategy is going to be centered around helping the advertisers understand the value of that premium inventory," she said.
Correction: An earlier version of this article incorrectly identified an AOL video series as "Last Lessons." The name of the series is "Laugh Lessons."