AOL had to sell more premium display inventory through ad networks, while search prices and query volumes declined.
AOL experienced a sickening 21 percent drop in its second quarter ad revenue, owing to pain in both paid search and display advertising.
AOL's display ad revenue on its own sites dropped 19 percent. Execs said a larger portion of premium inventory on AOL.com and other in-house properties went begging. As a result the company had to sell it through ad networks, resulting in lower prices for the real estate.
Yet the company's ad network business struggled too, as higher prices were countered by falling demand for remnant inventory. Third party network revenue was down 26 percent, to $124 million.
The picture wasn't much brighter for AOL's search business, where revenues decreased 13 percent on lower click prices and query volumes.
Execs said Time Warner is on track to complete the spin-off of AOL before the end of the year. Three weeks ago it repurchased Google's 5 percent stake in the company, and earlier this week the company filed a registration statement with the Securities and Exchange Commission.
"Separating AOL will benefit both companies ÃÂ¢Ã¯Â¿Â½Ã¯Â¿Â½ enabling Time Warner to concentrate fully on our core content businesses and improving AOLÃÂ¢Ã¯Â¿Â½Ã¯Â¿Â½s operational and strategic flexibility," said Time Warner CEO Jeff Bewkes. Also today, IAC posted Q2 results indicating weakness in both search and display. In addition to weakness in display, a decline in revenue at Citysearch reflected issues was related to the relaunch of the site and the integration of a new ad serving system, the company said.
IAC search revenue declines reflected lower cost-per-click prices but were also impacted by the relaunch of Ask.com, which reduced the number of queries in order to deliver results faster, IAC said.
August 10-12: Revolutionize your digital marketing campaigns at ClickZ Live San Francisco! Educating marketers for over 15 years, our action-packed, educationally-focused agenda covers every aspect of digital marketing. Early Bird rates available through Friday, July 17 - save up to $300! Register today.
Until March 2012, Zach Rodgers was managing editor of ClickZ's award-winning coverage of news and trends in digital marketing. He reported on the rise of web companies, data markets, ad technologies, and government Internet policy, among other subjects.
US Consumer Device Preference Report
Traditionally desktops have shown to convert better than mobile devices however, 2015 might be a tipping point for mobile conversions! Download this report to find why mobile users are more important then ever.
E-Commerce Customer Lifecycle
Have you ever wondered what factors influence online spending or why shoppers abandon their cart? This data-rich infogram offers actionable insight into creating a more seamless online shopping experience across the multiple devices consumers are using.