AOL is probably best known as a formerly massive American dial-up ISP that now publishes the Huffington Post. Even many people in North America (let alone Asia) aren't aware that the company has a Platforms division that has made significant investments in ad tech in recent years. Most significantly, the company owns video-buying platform Adap.tv, which it acquired last August for $400 million.
Early this morning (Asia time), at ad:tech in San Francisco, AOL announced AOL One, which it touts as an open platform that will simplify programmatic buying for all media—from mobile to online video to broadcast/cable television.
IPG Mediabrands signed on as the 'charter' agency network for the platform as part of its pledge to automate half of its media spending by 2016. One won't be fully operational until later this year, according to AOL.
The platform, according to AOL, will benefit the entire ecosystem—brands, agencies, media owners and tech providers. Agnostic and open, it will allow any company to plug in its technology and play along while reducing the inefficiency brands currently experience dealing with multiple providers individually, Alex Khan, Southeast Asia MD for Adap.tv, told Campaign Asia-Pacific in advance of the announcement.
"For every dollar spent today, multiple third-party partners are necessary," Khan said. "By the time the publisher gets paid, they're getting 25 to 40 cents. So that differential is the 'technology tax'. With One, we expect the publisher to get 70 to 80 cents." That will foster a far greater degree of investment in high-quality content, which can be put into the system and will in turn foster greater confidence to invest in that system, he said.
AOL's claims may hold water, but don't expect the platform to make waves in Asia anytime soon, according to insiders contacted this morning.
“AOL’s One is a very interesting step in the simplification of digital advertising and trying to reduce what they have now labelled the 'technology tax', even more so with its stated intent to be genuinely channel-neutral on one sophisticated platform," said Kristian Barnes, CEO of Vizeum Asia Pacific.
Tom Simpson, CEO of Singapore-based MediaQuark, which describes itself as a real-time media-intelligence company focused on Southeast Asia, agreed. "It's an interesting move from AOL, but not unexpected," he said. "We would anticipate more platform consolidation over the next few years from multiple similar players to AOL. At this stage, any development in the direction of automation is positive for the industry. It brings further attention to programmatic, and starts to make the automation of the ad stack more of a reality to agency buyers."
Hari Shankar, Singapore GM with Publicis' performance-marketing unit Performics, said AOL is pitching something that's badly needed. But he added that it's also a 'holy grail' that won't make an immediate difference here.
Too much too soon?
"A concept such as One, to me sounds like what the programmatic world, and in fact the digital-media world, has been waiting for," Shankar said. "But it sounds larger than life, at least from a global perspective, at the moment."
A "massive challenge" exists in the unification of platforms and technologies that cut across media channels, big-data platforms and analytics platforms, Shankar said. These challenges involve not only technology but also privacy issues, not to mention the agendas of competing players. Google is already working hard on these issues and has the potential to be more effective than AOL in solving them, he added.
"From an APAC perspective, it is an even more massive uphill task given the sheer diversity and differing maturity levels of markets," Shankar added. "I can't even imagine attempting to rope in the Baidus and SoSo's of the world, for example, to a utopian ecosystem like AOL's One, because of the next-to-impossible task of getting them to share any sort of data or technology that can make this ecosystem come to its true potential."
And it's not as if programmatic buying is languishing in Asia, Barnes indicated. "Programmatic advertising grew by 70 per cent in APAC in 2013, and will continue to accelerate as more marketeers understand the benefits it brings in connecting their brands with consumers, smarter and faster, across multi-devices and channels," he said. "The ability to target, buy, optimise and measure in real time creates compelling flexibility, strategic insights based on real behaviour and significant ROI."
AOL One will have less impact in Asia simply because AOL is not as big here as it is in North America, where it owns a lot of ad inventory on Huffington Post and its other media properties, Simpson said.
"Although many people would love to crack the unified ad stack top to bottom, the reality is that at this point the industry is still early stage, with plenty of consolidation and standardisation still to come," he said. "Running a completely closed ecosystem is not desirable right now, as even Google have discovered. Our advertising intelligence engine and data works with any platform, so we relish another exciting opportunity to work in what looks like a highly scaled and unified tech stack."
Adap.tv's Khan argued that offering brands and agencies a truly unified tool delivers immense value, even in APAC. "In Asia, the market is still somewhat playing catchup," he allowed. "But for a long time now, this idea of a singular platform that provides cross-channel reporting and optimisation has been something brands have been asking for. And I think it will have a very positive impact."
Khan cited the much-talked-about lack of digital talent in Asia as one factor that could drive adoption. By making the benefits of the technology accessible through a single dashboard and removing the overhead of maintaining multiple third-party relationships, One could provide brands and agencies with a higher level of efficiency and help them compete on a global level even though talent is thin on the ground, he said.