Summary:

AOL announced Marketplace, an effort to consolidate the stack of tools publishers use to serve ads. AOL is competing with Google in the ad tech field as it tries to diversify its revenues

Tim Armstrong
photo: AP Images

AOL today announced a new product for publishers called Marketplace, which integrates various elements of its ad tech platforms. The move comes as AOL redoubles its efforts to bring in revenue unrelated to its legacy copper wire business.

“This gets us back into the ad tech game in a serious manner,” said CEO Tim Armstrong, speaking at the AdTech conference in San Francisco on Tuesday.

The new Marketplace product, which will compete with offerings from Google and Adobe, is intended to provide publishers with an alternative to using multiple companies to carry out the process of selling and serving digital advertisements.

“All these companies create a false sense of complexity in industry but also take a lot of money out of it,” said AOL Networks CEO Ned Brody, in a recent interview. Brody claimed that the multiple pieces in ad tech amount to “too many mouths” to feed, and that AOL’s new integrated platform will let publishers keep 80 cents, rather than 50 cents, out of every ad dollar they receive.

Brody also argues that the lion’s share of ad tech innovation has occurred on the buyer’s side, giving brands new tools to obtain ads more efficiently but failing to help publishers. He claims tools like Marketplace will fix this imbalance. Brody also says that AOL’s own media entities, like Huffington Post and Engadget, use its ad tech tools — giving it a perspective on what ad tools other publishers want. An ad manager I spoke with was more skeptical, saying companies are constantly offering magic bullets to make advertising cheaper and easier but that the industry remains much the same.

From a larger business context, the ad tech offerings are also part of Armstrong’s efforts to refashion AOL into a company that no longer has to rely on its legacy dial-up internet subscriptions. This has meant creating two other separate divisions: one dedicated to its media properties, and another dedicated to its ad technology. Recent earnings reports show the two newer divisions are performing well from a revenue standpoint but are still waiting for profits to roll in.

At the conference, Armstrong also says he wants AOL to be like financial firm Goldman Sachs by relying on strong partner relationships, but also innovating in its own right.

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