Surge in programmatic revenue drives AOL ad income up by 18%

AOL has reported an 18 per cent year-on-year rise in advertising revenue to $473.4m (£297.3m) driven by a surging 37 per cent increase in programmatic advertising revenues.

Figures: AOL's programmatic has gone up by 44 per cent

Revenue from third party platforms, which includes programmatic, rose from $149.1m (£93.6m) in Q3 2013 to $215.1m (£215m) in Q3 2014 in total, driven partly by AOL’s acquisition of programmatic platform Adap.tv in August last year. However according to AOL, excluding revenue from Adap.tv the space still accounted for around a 22 per cent rise.

The increase saw programmatic push the strand into becoming the company’s biggest source of revenue and nudge subscription into second place.

AOL’s total revenue increased from $561.3m (£352m) in Q3 2013 to $626.8m (£394m) in Q4 2014.

Display revenue was stable over the year but did drop very slightly from $141.9m (£88.8m) a year ago to $141.5m (£88.9m) although the company said the figure was affected by the closure of some brands, such as Patch. Search revenue increased from $95m to $97.9m. (£59.7m to £61.5m)

Revenue from subscription fell by five per cent over the year from $161.6m to $153.4. (£101.5m to £96.4m)

Tim Armstrong, AOL chairman and CEO, said: “In Q3, AOL continued its strong growth in consumer traffic, revenue and profitability across its portfolio of assets.

“AOL is a leader in global content, video, mobile and programmatic advertising and is positioned directly at the centre of the most disruptive changes happening online and offline in culture and code.”

The company’s operating income increased from $16.7m (£10.5m) a year ago to $48m (£30.1m) in Q4 2014, and adjusted earnings per share fell by seven per cent to 52 cents.

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