With Digital Ad Dollars Flowing to Mobile, AOL Introduces Platform it Hopes Will Grab Them

Unified Platform's Success Will Hinge on Cross-Screen Identity Management

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After months of promotion, AOL is officially releasing its new ad-tech platform, called One, which it hopes will be its ticket to capturing advertiser dollars outside of desktop.

The platform brings AOL's point solutions, including its ad buying and attribution tools, into a single platform with a single login. The company is also releasing a new data-management platform which runs the length of One, allowing its users to better target and measure their ad buys, according to AOL executives.

I think we're launching a future platform," said AOL CEO Tim Armstrong. "It's truly the beginning of what these systems are going to look like."

The future Mr. Armstrong speaks of will be likely be driven by mobile spending, according to the latest forecasts. U.S. mobile ad spending, according to eMarketer, will go from $19.1 billion last year to $28.7 billion this year to $40.5 billion next year. In 2016, that $40.5 billion mobile spend number will far outpace desktop, which eMarketer predicts will hit $26.5 billion.

AOL does not break out its mobile ad revenue, so it's difficult to tell how it's performing compared to the market. But it's up against steep competition from platforms such as Facebook and Google, which can definitively tie user identity across devices thanks to login data. That data is pivotal in mobile advertising, given the ineffectiveness of the cookie in mobile environments. And, as people spend more time on mobile, so-called "cross-screen advertising" will be impossible without a close to perfect solution for effective mobile targeting.

AOL does plan to use its own login data, from products such as AOL Mail and the Huffington Post, to tie user identity together in a similar way to other big platforms. After adding in some other data sources, AOL can match user identity across devices 93% of the time, according to comScore.

"Mobile is absolutely a cornerstone of the system we have, we built and what we're launching," Mr. Armstrong said.

The company hopes this ability to tie user identity across devices will allow its platform to generate media spend recommendations its clients will trust. The One platform gathers information from media buys across various channels -- display, email, TV and more -- and, based on return on investment targets its clients input, spits out how they should adjust their spend to hit their targets.

Lauren Fisher, an analyst at eMarketer, said the new platform is strong and is especially useful to those marketers looking to apply more data in their TV buys. "I think this is a smart play by AOL," she said.

At the end of the day, One's promise will be fulfilled only if it continues to excel in cross platform identity management and if its spend recommendations are effective. The risk AOL is taking is one it must if it's going to thrive when revenue from the membership (read: dial up) segment of its business dries up.

AOL is well aware of the challenge ahead. In the notes section of the presentation it shared with Ad Age yesterday, the first slide contained this prompt: "AOL has evolved from the AOL dial up program our parents and grandparents used to a content and programmatic leader."

The fulfillment of that vision will rest on the performance of the platform released today.

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