News: Press Clippings

Verizon-AOL-Millennial Media triple play sets stage for unique mobile ad offerings

Reposted from Mobile-Marketer-Logo1
Publication date 9/4/15
After years of jockeying for a bigger role in mobile advertising, Verizon is throwing serious money behind its aspirations, spending $4.4 billion deal for AOL several months ago and, this week, another $250 million to boost the digital platform’s mobile play by buying Millennial Media.
Because the latest deal has the potential to set up a walled garden with a unique set of offerings across mobile, it could be significant if the parties involved can pull it off. Bigger picture, such consolidation is likely to continue as marketers increasingly invest in cross-channel marketing strategies.
“If Verizon/AOL can successfully integrate Millennial Media, they will be sitting on an impressive set of assets across the full potential of mobile,” said Jon Baron, chief revenue officer at marketing cloud company IgnitionOne.
“This could result in a walled garden with a unique set of offerings for advertisers that could be very beneficial – if they can make it work,” he said.
Mobile consolidation
AOL’s acquisition of Millennial Media subsumes one of the largest independent mobile advertising players at a time when it is getting harder to compete because of mobile’s growing influence.
With Google and Facebook together commanding such a significant share of mobile advertising dollars, wireless carriers such as Verizon increasingly recognize that they cannot simply dabble but need to have a comprehensive offering if they are compete for advertising dollars.
“Many issues such as targeting, viewability, creative, fraud, and transparency are still apparent in the mobile advertising ecosystem,” said Dirk Rients, founder/CEO of Mobile Ventures. “Companies that solve all of these issues will continue to succeed while the others either get acquired or fail.
“The deal allows Verizon to combine their wireless customer data, AOL’s large advertiser base and technology, Millennial Media’s access to mobile ad inventory and offer this to marketers and agencies as an integration solution,” he said.
More to come
The trends in the marketplace are setting the stage for a number of other major deals from wireless carriers in the mobile advertising space.
“This acquisition is only the beginning,” IgnitionOne’s Mr. Baron said. “There have been just a handful of major plays in the space – however the writing is on wall.
“As telcos begin to realize the importance of having a strong advertising infrastructure as part of their offerings, they are quickly moving into the space,” he said. “I think we’ll see more of these giants make moves in the next year.
“In addition, point solution based companies will have shorter and shorter lifespans. You can no longer exist as a silo in the ad tech world for very long. Integration and consolidation need to happen to centralize the functionalities and customer data.”
Mobile-first programmatic
According to Verizon, the deal will make ONE by AOL the largest open and mobile-first programmatic platform in the market.
The deal brings significant mobile brand advertising scale to AOL, including strength in international markets such as Singapore, Japan, Britain, France and Germany as well as access to approximately 1 billion global active unique users and robust addressable and cross-screen targeting capabilities.
It comes at a time when programmatic buying continues to grow, with 69 percent of mobile ad spend expected to be bought and sold programmatically – more than $14 billion – by 2016, according to eMarketer. Additionally, programmatic video is expected to reach $4 billion by that date.
Mobile display and video advertising are also experiencing strong growth.
“We expect this deal to make AOL an even more attractive option for developers, marketers, and agencies as it leverages the scale and reach of Millennial’s mobile network with AOL’s existing mobile inventory and ad products,” said Sean Cullen, ‎executive vice president of product and technology at Fluent.
Battle for dominance
Millennial Media, which was formed in 2006 and is headquartered in Baltimore, MD, was itself on a buying spree over the past few years as it looked to stay competitive with new offerings in the quickly growing mobile space. Over the past several years, Millennial added Nexage, Jumptap and others mobile advertising companies to its stable.
Millennial’s acquisition by AOL suggests that company found it increasingly difficult to remain independent as the stakes in mobile advertising continue to grow.
“There is a battle underway for dominance in mobile advertising among very large companies,” said Matt Nitzberg, chief growth officer for ThinkVine. “Independent companies which can create competitive advantage for the giants – through innovation, expertise, relationships, networks, and scale — will continue to be sought after.”
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