Media Buyers Give Thumbs Up To New AOL Ad Network

by Gavin O'Malley, Tuesday, Sep 18, 2007 7:45 AM ET

WITH ITS CONTINUED FOCUS ON advertising, AOL has established a new division for its ad networks--including Advertising.com and Tacoda--and named Curt Viebranz, former CEO of TACODA and a one-time Time Inc. executive, to lead it. The unit, called Platform A, will reach an estimated 90% of Web users. AOL also announced that it's moving its headquarters from Dulles, Va. to the media capital of the world--New York City. "Over the past eight months, we have put together a network with unprecedented reach and state-of-the-art solutions," said Randy Falco, Chairman and CEO of AOL. Platform A will encompass Ad.com, the direct-response network AOL acquired in 2004; Tacoda, the behavioral ad network it recently bought for $275 million; the video ad network named Lightningcast; Third Screen Media, a mobile ad network, and AdTech AG, an international online ad-serving company based in Frankfurt, Germany. "With the launch of Platform A, we are unleashing this powerful network to deliver unrivaled transparency and return on investment for our marketing partners," said Falco. Viebranz has been named the president of Platform A--while Mike Kelly, president of AOL Media Networks, is leaving the company. Lynda Clarizio will continue to head up Ad.com, and Kathy Kayse, senior vice president of sales at AOL Media Networks, will now run AOL brand advertising. Dave Morgan, who was rumored to be getting a new title with within AOL, will hold on to his position as chairman of TACODA. Media buyers were positive on the news, adding that AOL's recent spate of ad network acquisitions would have been pointless without their eventual integration. "It wouldn't have made sense otherwise," said Steve Ustaris, group media director at Aegis Group's Carat Fusion. "This will make it much easier to manage inventory." The reorganization comes amid criticism that AOL has so far failed to meet some media buyers' expectations, and less than two months after parent company Time Warner released slower ad growth numbers for AOL--news that sent its stock price down 3%. Still a force to be reckoned with, AOL has plenty of admirers in the agency world. "They've done a good job responding to sales leadership, and it's great to see them focusing their efforts in this area," said Ed Montes, executive vice president-managing director of Media Contacts, a digital media agency owned by Havas. "They very recently came to us with some interesting new products that combine several of their new ad networks." Selling advertisers both performance-based and branding programs, AOL plans to eventually have a single data platform that would give it the ability to target ads across its different network businesses. AOL is not alone in its focus on ad networks as a way to fend off a slowing ad market overall. Yahoo, Microsoft, and even holding company WPP Group have invested in ad networks over the past year. "With the increasing fragmentation of online audiences, the best way to serve advertisers is to enable them to harness massive advertising networks that reach across the entire Internet, not just our AOL Web sites," said Falco. AOL, however, might do well to concentrate less on new ad networks, and more on its own ad inventory, commented David Moore, chairman and CEO of 24/7 Real Media, the online ad firm acquired by WPP Group in July for $649 million. "It's interesting to watch all these portals buying up ad networks when they're not sold out on the inventory they've got on their own sites," Moore said. Separately, AOL on Monday said it has signed an agreement with HP to offer co-branded, localized versions of its portal, toolbar and search on HP desktop and notebook PCs sold worldwide. Under the agreement, the co-branded portal will be set as the default home page, and the co-branded toolbar and search will be default settings in various countries worldwide. The agreement extends and expands the existing relationship between HP and AOL, which provides consumers with a co-branded AOL/HP portal as the default home page for HP consumer PCs sold in the U.S. Gavin O'Malley can be reached at gavin@mediapost.com