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AOL Rebounds as Programmatic, Video Push Double-Digit Growth

Premium ad formats help reverse downward trend

After years of stymied growth, programmatic and video advertising have helped AOL reposition itself in the US digital display advertising market, according to new figures from eMarketer.

This year, eMarketer predicts AOL will see its first double-digit US ad growth since the recession started, driven by accelerating display ad growth rates. AOL’s net US digital display ad revenues will increase 15.5% this year and will maintain double-digit growth in both 2015 and 2016.

Despite its success, AOL is still growing slower than rivals Facebook, Google and Twitter. Facebook saw a 50.5% increase in US display ad revenues last year, according to eMarketer, thanks to its strong mobile ad business. Google’s net US digital display ad revenues grew 33.3% last year, compared with 9.5% for AOL.

AOL’s recent growth is heavily attributed to programmatic display advertising, as well as its Adap.tv property, which has had success selling premium video ads.

Spending on real-time bidding (RTB), which accounts for about half of US programmatic ad buys, grew 76.5% in 2013, according to eMarketer, and will increase 43.4% this year to total $4.86 billion. That figure will continue to increase rapidly, growing 36.6% in 2015 and another 31.4% in 2016.

Digital video ad spending also grew quickly last year, up 44.5% to $4.18 billion. This year, eMarketer expects video ad spending to increase 41.0% to $5.89 billion. By 2018, RTB spending and video ad spending are both expected to settle north of $12 billion.

eMarketer bases all of our forecasts on a multipronged approach that focuses on both worldwide and local trends in the economy, technology and population, along with company-, product-, country- and demographic-specific trends, and trends in specific consumer behaviors. We analyze quantitative and qualitative data from a variety of research firms, government agencies, media outlets and company reports, weighting each piece of information based on methodology and soundness.

In addition, every element of each eMarketer forecast fits within the larger matrix of all our forecasts, with the same assumptions and general framework used to project figures in a wide variety of areas. Regular re-evaluation of each forecast means those assumptions and framework are constantly updated to reflect new market developments and other trends.

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