AOL Acquires Lightningcast for Video Ads

AOL has acquired broadband video ad management company Lightningcast, and will add it to its Advertising.com division. Financial terms of the deal were not disclosed.

“This acquisition will provide a huge infusion of talent, technology, and publisher relationships for Advertising.com at a time when streaming video is growing at a blistering pace,” said Mike Kelly, president of AOL Media Networks, which oversees Advertising.com.

Through its InStream video ad network, Lightningcast sells streaming media inventory for owners and distributors of broadband video and audio content. It manages the ad insertion, campaign management and reporting across its network of partner sites. It also offers its ad-serving platform to publishers under a license for use on their own sites.

CEO Tom MacIsaac and Lightningcast’s 34 Washington, D.C.-based employees will remain with the company, operating it as a wholly-owned subsidiary of AOL’s Baltimore-based Advertising.com. Advertising.com’s newly launched pre-roll video network and the InStream network will merge, operating under the InStream name with 300 publisher sites and 175 million monthly streams.

“Our heritage is as a technology company. Our goal was to be the biggest and best video ad network. I think we found the answer with Advertising.com, the biggest and best interactive ad network,” MacIsaac told ClickZ.

AOL has used Lightningcast’s platform since 2002, first for audio on its AOL Radio property, and later for video ads in AOL Video and its “In2TV” network, launched in conjunction with Warner Bros. Earlier this year, Lightningcast was tapped by Microsoft to manage video ads for MSN Video’s live streaming events.

The existing InStream sales force will focus exclusively on video, working with the Advertising.com sales team to build cross-sell opportunities across that company’s rich media, Web, search and behavioral marketing offerings. The InStream network will take advantage of Advertising.com’s targeting opportunities, including behavioral, demographic, and content channel-based targeting.

“Advertising.com has been a leader in display advertising, optimizing for performance across its network. We see the same opportunity with Lightningcast and video ads,” Kelly said.

Immediate plans call for Lightningcast and Advertising.com to capitalize on existing opportunities in the market with their combined strengths, MacIsaac said. Future products that Lightningcast has already been exploring include solutions for wireless, mobile, and podcast ads, he said.

Lightningcast created a streaming media ad network back in 2000. It launched InStream last year, becoming the first company to manage a large amount of pre-roll and other in-stream ad inventory across multiple sites on the fly.

The InStream technology includes the ability to remove and replace ads that may already occupy a broadcast video feed, useful in cases where a live event is being rebroadcast online, something AOL has had some experience and success with.

The platform also has support for display ad elements that are synchronized with a streaming ad, something that AOL has been doing with DoubleClick’s DART technology since last year.

Join ClickZ’s Online Video Advertising Forum in New York City, June 16, 2006.

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