AOL Rolls Out New Platform in Bid to Become Digital Ad Hub

AOL Inc (NYSE:AOL) on Wednesday unveiled a new advertising platform aimed at changing the media buying process for digital advertising by becoming a one-stop shop.

The new platform, dubbed One, will knit together AOL's various ad technology offerings like its recent acquisition of Adap.TV, an electronic trading platform for video advertising.

One is an open platform that will work with the hundreds of ad technology companies that have crowded the digital landscape. AOL has also launched smaller tests to purchase TV advertising through the platform.

AOL Chief Executive Tim Armstrong compared One to Apple's iTunes store, which offers hundreds of apps from various companies.

"Most significant advertising is going to be as easy as e-commerce," Armstrong said in an interview, noting the movement toward automated ad buying.

"One of the trends happening is that the consumer services side of the Internet is starting to bleed into the business (services) side of the Internet."

The move could be significant for AOL as it maneuvers to become the hub of the digital media buying process, which is quickly becoming automated, similar to how Wall Street investors trade stocks on exchanges. Google and other companies, like Adobe, have similar offerings.

Advertising revenue is an integral part of AOL's operations as it moves away from dwindling but lucrative dial up subscriptions.

During the fourth quarter, AOL's advertising revenue soared 23 percent to $507 million.

"I think AOL has a very large vision for where the advertising world is going," said Susan Bidel, a senior analyst at Forrester Research.

"They see it as one big digital platform. From a marketer's' perspective, to be able to plan and execute across platforms for single campaigns, that is the holy grail."

In some ways, AOL is going up against the advertising agencies it assiduously courts, since many firms have set up their own trading platforms.

But for now, AOL has won the backing of Interpublic Group's Mediabrands unit, which said it plans to use the One platform.

"We have publicly stated that we plan to deliver 50 percent automation to our North American buying process by 2016, with other international markets following closely behind," Matt Seiler, global CEO of IPG Mediabrands, said in a statement.

"We intend to use AOL as the primary platform partner to execute on that commitment."

AOL Platforms Chief Executive Bob Lord said the company hopes to partner with more agencies. "The major fundamental problem is the chaos and confusion that exists around placing digital media," Lord said. "What agencies would love is to actually not spend a lot of time in chaos and re-purpose the money back into creativity and content."

(Reporting by Jennifer Saba in New York; Editing by Dan Grebler)