AOL’s Move to Video Ads Pushes Q3 Revenue to $386 Million

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ADOTAS — Things are continuing to look up for AOL these days. Today the company announced a 14 percent year-over-year jump in ad revenue to hit $386 million in the third quarter of 2013, due in part to its aggressive push towards video advertising. Today’s earnings announcement sparked an AOL stock rally, and shares spiked up about 8 percent to $41.85 by noon.

The company has navigated through some rough waters over the last decade, going through what some industry veterans characterized as somewhat of an identity crisis. The company once known primarily as an Internet Service Provider and software suite for consumers looking to get online back in 2000, has emerged as a media powerhouse under the leadership of CEO Tim Armstrong (pictured). Under Armstrong’s guidance, AOL has acquired a range of content properties including TechCrunch, Huffington Post, Engadget and MapQuest.

AOL acquired online video ad exchange and server Adap.tv for $405 million back in September and today the property accounted for $17.6 million of AOL’s revenue in Q3. Additionally, revenues for AOL’s Third Party Network surged 32 percent year-over-year.

The company’s plan to corner the video ad market began last year where, back in April of 2012, AOL took steps to expand revenue generation through online video, announcing it would offer gross rating point guarantees for online video. This would guarantee audience delivery for online video advertising campaigns bought across its properties.

Armstrong has made a huge effort to revitalize the company, investing heavily in programmatic ad technologies and touting the synergistic balance between automation with the human art of advertising.

Despite the overall ad revenue increases in Q3 2013, AOL’s ad business witnessed only $2 million in profits, reflecting a 90 percent decline while display revenue hit $141.9 million, a 5 percent increase from the same period a year ago. Search revenue was at $95 million and represented just a 3 percent increase from the quarter a year previous. AOL’s Brand group that includes Huffington Post and other online media properties reported $192.5 million in revenue, a 9 percent increase year over year.

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