AOL makes another foray into ad-tech acquisitions
On this blog, we've written about several ad-tech acquisitions in the past. If growing a following is the goal of any website or service platform, then the next step is finding a way to leverage that usership into ad revenue. With the advent of mobile platforms and other technologies, advertisers need more diverse and reliable ways to reach consumers in the most productive way possible, which is why large web entities have begun buying firms specializing in the technology of placing ads.
It was recently announced that AOL has acquired Millennial Media, a mobile ad network that places advertisements on tablet and smartphone screens. As AOL continues its progress from mail and browsing platform of the early internet into a fully-fledged content producer, the ability to effectively place ads is critical to expansion.
Cathy Boyle, an analyst for eMarketer, said that to be a "serious player" in the mobile display ad market, companies need to offer scale, complex measurement tools and powerful audience targeting. With the purchase of Millennial Media, AOL stands to gain ground in all of those areas, she says.
"The acquisition will expand the breadth and depth of the in-app display ad inventory AOL can offer advertisers, which will help those advertisers achieve greater scale," said Boyle. "In addition, the publisher will gain the mobile user profile data that Millennial Media has been amassing for years, which will help improve AOL's ability to find and target specific audiences on mobile devices."
AOL made M&A headlines earlier this year when it was announced the company would be acquired by Verizon, the telecom giant.
Earlier this year, Christopher Heine of AdWeek predicted that Verizon's purchase of AOL would spur activity in the ad-tech space. He interviewed Brian Wieser, senior analyst at Pivotal Research Group, who supported the idea that with more telecom interest in online media, generating ad revenue would take priority. One aspect of the Verizon deal that made AOL such an attractive purchase, analysts say, is its move into content creation as a primary goal. With the acquisition of The Huffington Post and other digital media entities, the umbrella of journalism, entertainment and information AOL hosts has widened and gained prestige.
"It's not just about M&A in general," he said. "Companies that are not traditionally perceived as participating in advertising are looking to buy companies that have significant ad-tech assets. It could be another teleco [like Verizon]; it could be another data services provider."
This makes ad-tech a rich environment for startups, as the constantly evolving world of digital media advertising becomes more sophisticated and engineered for new platforms and technologies. Moreover, companies are aiming to create a more immersive and engaging ad experience so that users don't feel inconvenienced by the presence of ads among other content.
With the guidance of an experienced M&A advisor, your tech startup can complete a successful merger or acquisition. Our experts can help your business find, negotiate and sign a deal that helps achieve your growth objectives. Contact us today to learn more about the benefits of working with an advisor.