AOL Tries Another Foray Into Ad Tech With DSP to Compete With Google, Startups

More Real-Time Bidding For the Portal's Advertisers

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AOL was once a power in ad technology but was overtaken by Google and a host of startups as it focused on transforming itself into an ad-supported media company.

But AOL isn't done investing in the tech side of the business: The company is set to release a technology Tuesday that allows advertisers to bid in real-time on audiences across AOL's properties and on big ad exchanges at Yahoo and Google.

The technology is similar to the so-called demand-side platforms, or DSPs, that have become popular tools for buying online audiences. Called AdLearn Open Platform, AOL's version is built off of technology from AOL's network business and gives agencies and marketers the ability to bid in real time on AOL owned-and-operated inventory, publisher inventory as well as other remnant inventory found on large ad exchanges.

Brands and agency trading desks can either license the technology or have AOL manage campaigns on AdLearn for a fee.

"This is all part of our strategy to try to play in as many parts as possible of the nonreserved space," said Ned Brody, AOL's chief revenue officer.

AOL's ad-network business grew 20% year-over-year in the fourth quarter of 2011. Mr. Brody said the new DSP product is essentially AOL's in-house ad-network technology with a user interface built on top. Agency trading desks Accuen and Mediabrands Audience Platform have signed on as beta clients.

Mr. Brody said AOL will roll out two other ad-tech products this year. One will likely be a sell-side platform to help publishers manage their ad inventory and better control who gets access to it. AOL hopes that it can eventually make other ad formats available through the DSP such as splashy Pictela display ads as well as video and mobile ad units.

"The goal is that much more premium inventory can flow through it," said Mr. Brody.

The question for AOL is can it focus, and be successful at, both the online media business and the ad-tech business. Right now, Google owns the most complete stack of ad-tech offerings in the market, which can both make things easy for advertisers, but also scare them because of perceived conflicts of interest.

"It's an expensive proposition to take on existing stacks, especially Google's, in any capacity," said Chris Copeland, CEO of Group M Search.

Mr. Copeland noted that there's no blueprint for a big internet company that has excelled both at tech and content. Yahoo, he said, has struggled to excel at both simultaneously. And while Google is a tech leader, it's social and content plays are still largely a question mark.

"It's really hard to be all things," he said, "so unless there's a laser like focus, this might pull away from their core strategy."

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