AOL’s acquisition of mobile ad firm Millennial Media underlines the rapid rise of programmatic advertising, as new research shows that automated buying will grow massively this year and account for more than half of the UK’s £3bn digital display market.
AOL, which was acquired by telecoms giant Verizon for $4.4bn in May, has paid $238m for the publicly listed Millennial Media.
For AOL, which boosted its programmatic ad technology buying video platform adap.TV for $405m in 2013, the deal marks a major move into computerised ad buying on mobile devices.
Millennial Media operates a mobile ad network with more than 65,000 apps, and in-app ads have the added benefit of avoiding content-blocking software.
AOL said that the deal means it now has access to about 1 billion global active unique users, scale critical in its battle against rivals including Facebook and Google.
Bob Lord, president of AOL, said: “AOL is well positioned as consumers spend more and more time on mobile devices and as advertisers, agencies and publishers become more reliant on programmatic monetisation tools.”
The deal comes as new research shows that the UK market for programmatic ad buying will grow 66% this year to account for more than half, some £1.8bn or 59%, of the £3bn digital display advertising market.
The report, eMarketer’s first-ever estimate of programmatic advertising in the UK, shows it will be worth £2.5bn, or 70% of the total £3.5bn display ad market this year.
“The balance of UK digital display ad spend will tip towards programmatic for the first time this year,” said Bill Fisher, analyst at eMarketer. “Initial trepidation is being replaced with a realisation that programmatic can deliver the inventory, partners and prices that marketers want.”
On Thursday, the Rubicon Project, an advertising technology company, announced a deal with media trading platform BitPoster to bring programmatic advertising to the UK digital billboard and poster market.
BitPoster works with media owners accounting for over 300,000 digital outdoor sites nationwide.
“Rubicon Project’s mission has long been to automate the buying and selling of advertising across all media types, and this partnership is a watershed moment in the company timeline,” said Jay Stevens, international general manager at Rubicon Project. “This deal will finally enable advertisers to reach audiences in and out of home environments with the same efficiency and effectiveness they have been able to achieve online.”
Earlier this year, the Guardian, Financial Times, CNN International, Reuters and the Economist teamed up to pool their digital advertising space for programmatic buying in an initiative called the Pangaea Alliance.