By Sahil Patel
AOL has acquired programmatic video ad platform Adap.tv for $405 million, $322 million of which was in cash. In the announcement of the acquisition AOL called Adap.tv the “only complete” global programmatic video tech stack for buyers and sellers across all screens. Adap.tv currently services 83 of the AdAge top 100 advertisers and 70 of the Comscore top 100 web publishers.
Adap.tv will operate as an independent unit within AOL’s video organization, which is led by senior vice president of video, Ran Harnevo. It will also be included as the overall solution offered by AOL Networks, which is headed by the recently hired Bob Lord. The AOL Networks portfolio also includes Advertising.com, AOL On, Be On, AdTech, and Pictela.
In the past few months Adap.tv had been paired with Tremor Video and YuMe as one of three video ad companies looking to go public by the end of the year. Tremor has already gone public and YuMe has filed for an IPO. Adap.tv, while having explored the idea of going public, ultimately decided to take this deal.
AOL’s decision to buy Adap.tv is painted as a result of the company seeing the future of online video and advertising being programmatic. “Two trends are prevalent in the video space right now — the movement from linear television to online video and the shift from manual transactions to programmatic media buying,” says AOL CEO Tim Armstrong via a statement.
“We believe that most TV advertising will soon be traded programmatically on platforms like ours,” adds Adap.tv CEO Amir Ashkenazi. “The combination of AOL and Adap.tv accelerates our vision of efficient and effective TV and video advertising.”
More importantly, though, this deal moves AOL closer to the top of the online video food chain, which is currently dominated by YouTube. AOL On has been second to YouTube for most of the past year in terms of monthly video views (according to Comscore numbers). With the addition of Adap.tv, which was one of only four video ad companies to stream more than 2 billion ads in June, AOL hopes to move up the video ad charts as well. In the announcement, AOL says the combination of AOL On and Adap.tv will allow the company to offer an “end-to-end” video solution spanning original online video, syndication, a video CMS technology, and programmatic buying and selling. Armstrong says the combination will create “the leading video platform in the industry.” So yeah, it’s safe to say ambitions are high.