When AOL acquired online ad management firm AdTech two years ago, many interpreted the move as a defensive response to Google’s just-announced deal to buy DoubleClick.
AOL had long been among DoubleClick’s largest ad serving clients. And while DoubleClick swore to its publishers that their traffic and pricing data would never be shared with Google’s ad sellers, some have wondered whether it could keep that promise as a practical matter. AOL’s concern was only amplified by the fact that it already partnered with Google on search, meaning its ad operations would be managed entirely by Google.
Well AOL needn’t worry anymore. The company’s ad selling unit, Platform-A, will announce today it has fully migrated to AdTech’s system for all client ad campaigns. With the transition, nearly two years in the offing, ads served across AOL’s Web sites and its third-party ad networks will be delivered and reported in-house. The move will save millions of dollars a year in technology costs alone, while generating performance efficiencies, the company said.
Dirk Freytag, AdTech’s CEO and now SVP at Platform-A, acknowledged competitive concerns had resulted in the merger of his firm with AOL.
“It was a political purchase because AOL did not want to be 100 percent dependent on Google technologies,” he said. However he declined to say whether Platform-A was particularly worried about the misuse of its data to benefit Google ad sales.
Freytag emphasized the value of the acquisition goes far beyond its competitive benefits. Revenue generated by AdTech clients outside AOL has increased approximately 50 percent per year for the past three years — a notable bright spot in a very dark period for AOL. The Time Warner unit’s total ad revenues in Q4 dropped 18 percent compared with the year-ago period, and its display ad sales plummeted 25 percent.
As AdTech seeks to grow its customer base, Freytag acknowledged the ad trafficker faces the same publisher skepticism DoubleClick has had to contend with in the wake of its purchase by Google. He argued AdTech is absolutely separate from the ad selling functions at Platform-A, even noting the company’s offices in New York are at a different address from those of AOL.
AdTech was founded in Europe, and still has more offices there than it does in the U.S., where AdTech is less well established, Freytag said. AdTech has 65 Web site and network partners here, including Tremor Media and Metromix.
Freytag said the switch to in-house ad management will also generate significant campaign trafficking efficiencies for Platform-A, including reducing the time necessary to launch or alter a campaign to just a few minutes. AdTech’s reporting will also be faster than DoubleClick’s, he said.
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