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AOL to create first screen-agnostic programmatic ad platform as it looks to crack down on “technology tax” rife in the market

By Jessica Davies, News Editor

IPG Mediabrands

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aol article

March 26, 2014 | 5 min read

AOL is to unite its programmatic offerings into a single, screen-agnostic platform – AOL One – as it looks to crack down on the amount of “technology tax” in the programmatic supply chain.

The internet giant is planning to bring its entire programmatic offering, which includes newly acquired Adap.tv, AdOpenLearn and Marketplace, under one banner as part of overarching plans to simplify the programmatic buying process for publishers and brands, letting them trade across mobile, online, video, and linear TV.

AOL Platforms CEO Bob Lord unveiled the strategy today alongside chairman and CEO Tim Armstrong and launch partner IPG Mediabrands, while outlining the company’s vision for an “open ecosystem” in which partners and competitors, publishers and marketers, are all beneficiaries of a “platform-driven” industry.

The plan to unite its programmatic systems is underway and is aimed at reducing the “chaos” currently rife in the ad tech industry, according to Lord.

“Our industry has developed too many niche offerings and specialised services over the last 25 years, and chaos in ad tech is at an all-time high. The inefficiencies, ineffectiveness and expense of managing multiple teams, tools and metrics for display, mobile and video, across all devices, are stifling,” he said.

IPG Mediabrands has been unveiled as launch partner, reinforcing its commitment to fully automating half of its media investments in the US by 2016.

Lord said the organisation’s “mission” is to foster an open, global ecosystem that “simplifies digital advertising”, letting publisher and advertiser partners tap into the technology and data ecosystem.

“Customers who have a commitment to an external partner for a piece of the ad tech stack will be able to integrate and plug that solution into our platform giving advertisers and publishers alike incredible flexibility with elements like data and attribution to join and manage all of their investments on a single platform in real time,” he added.

AOL has coined the term “technology tax” to refer to the number of middleman intermediations involved in a typical programmatic buy, as well as the mark-ups and margins that can get sucked along with them.

US technology tax infographic: source - AOL

It has estimated that $75bn of the $100bn global programmatic spend is lost as a result of this “tax”, while for the UK specifically that figure is £3.5bn of the overall £6bn (see below). AOL’s head of international networks Graham Moysey told The Drum that the current value chain is too siloed and fragmented. “We feel strongly that there are time and dollar efficiencies that will be realized over time for brands and publishers and that is why we have unified our products.”He described the “seismic shift” toward programmatic trading as both “exciting” and “daunting”, but that the idea of driving automation permits both money and time savings for companies like AOL, which has so far made great returns from programmatic, and frees it up to make significant investments on the other side of its business in premium content and formats.

UK technology tax infographic: source - AOL

Earlier this week it announced a major content deal with third parties including Channel 4 News, and ITN, which will see a huge range of premium video clips brought to the site. “We have been on journey for last four years building these platforms or acquiring them to facilitate the efficient flow of advertising towards digital. This announcement is a culmination of that and we feel strongly that no one is optimising across screens right now – lots are participating in this space and claiming a unified [programmatic] platform across screens but we don’t feel anyone really is.”The same can be said specifically for TV, which Moysey believes is the biggest differentiator in the announcement. “TV is coming. We made the announcement with Magna in terms of being able to measure and drive programmatic across TV ad buying – so we think that’s a trend that will increase in speed."AOL, which has more than 22,000 publishers in its global network, will develop the unified platform this year, and expects to reveal the next phase of its development by the end of the year. It is also renaming its technology division AOL Platforms (formerly the segment known as AOL Networks) to better explain its platform offerings to marketers, agencies and publishers.

AOL CEO Bob Lord

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