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Direct Response Marketing

AOL Moves Closer to Programmatic TV

28 May, 2014 By: Doug McPherson


NEW YORK – Analysts say AOL’s recent acquisition of PrecisionDemand, the advanced TV audience targeting platform, is moving AOL closer to the programmatic TV buying space.

Joe Mandese, a writer with MediaPost, calls the deal “significant” for several reasons, including the fact that PrecisionDemand owns key patents for TV ad targeting, but also because the acquisition pushes AOL more deeply into access of conventional “‘linear” TV advertising inventory.

PrecisionDemand is one of several start-ups using big data to refine the way advertisers and agencies target TV advertising inventory – based more on the actual audiences versus using programs as a proxy for reaching them. By matching a client’s own first-party data, with third-party data and linking it to census-related audience data from digital set-tops, these players claim they can target TV audiences with unprecedented precision.

“Importantly, the ability to target specific audiences plays directly into Madison Avenue’s shift from media-buying to audience-buying, and facilitates a marketplace where TV audiences can be planned, bought and sold alongside digital audience inventory on programmatic trading systems used by advertisers, agencies and agency trading desks,” Mandese writes.

PrecisionDemand will become part of San Mateo-based Adap.tv, developer of a programmatic video ad platform that AOL acquired for $405 million last summer.

After buying Adap.tv, AOL announced a deal with Interpublic’s Mediabrands’ Magna Global unit to make it a cornerstone of its TV audience-buying platform.

Mandese says Mediabrands is one of the most aggressive agencies pushing the transition to programmatic and has set a goal that 50 percent of its media will be bought via automation systems by 2017.

Toby Gabriner, the CEO of Adap.tv, wrote in a blog post, “PrecisionDemand will be a key component of our advanced TV targeting, attribution and optimization technology available in the market. We are greatly accelerating our efforts in creating the platforms needed to manage today’s multiscreen video world, through Adap.tv today. The opportunity here is immense; we have built and collected the assets to take advantage of it, and I am excited by the challenge of unlocking our potential.”

Gabriner added the integration would let advertisers and agencies connect “consumer purchases back to specific TV ad buys, not just the usual media mix modeling that is used today.”

Terms of the deal were not disclosed, but Mandese says PrecisionDemand had been known to be struggling to develop a revenue stream and some of its investors were eager to exit. To date, it had raised $18 million from Rho Ventures, StarVest and OVP.
 


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