Earnings: AOL and Sizmek revenue growth reflect strength in programmatic, video and mobile
What: AOL and Sizmek Q1 2014 revenues were US $186 million (55% growth) and US $38.4 million( a 13% year-over-year increase) respectively.
Why it matters: Both companies Q1 revenues were mainly driven by programmatic products, video and mobile, reflecting a high growth rate in these segments of the digital media market.
Both AOL and Sizmek announced strong 2014 first quarter revenues, reflecting a high demand for programmatic products, video and mobile.
AOL´s ad platform business revenue grew 55% during the first quarter 2014 to US $186 million. Display grew 4% driven by improved inventory pricing.
- Its´combined programmatic products ,which includes Adap.tv, AdLearn Open Platform (AOP), and AOL Marketplace , grew at over 100% year over year.
- Mobile also tripled year over year.
- Global advertising revenue grew 16% year-over-year. Third Party Platform Revenue grew 18% excluding Adap.tv.
Despite the strong overall revenue growth, the company has also experienced a 3% decline in global display revenue , a 2% decline in its´ properties revenue and a 1% decline in global search revenue owed to a decline in AOL core search queries.
According to AOL CEO Tim Armstrong, within two years, 70% of all ad spending will be programmatic, and 30% will channel through direct partnerships with content companies:" To capture as much of that 70% as possible,we are mechanizing media and advertising and our strategy is narrowing based on where we see significant opportunities."
In order to accelerate sales of its ad tech product set, AOL has created an enterprise sales organization to launch its unified ONE by AOL stack into agencies and advertisers, to platform advantages.
High mobile revenue growth at Sizmek
Ad tech company Sizmek Q1 2014 revenues were US $38.4 million, a 13% year-over-year increase.
- Mobile revenue has increased 90% year over year. The company keeps on investing in this channel with its latest Device Intelligence launching , to enable accurate identification and targeting across handsets, tablets and desktops.
- Video online advertising only accounts for roughly 10% of Sizmek’s revenue.However, revenues grew 132% year over year . That is why Sizmek has recently rolled out a beta version of its Video Verification solution, which is intended to reduce wasteful spend for advertisers who often pay for premium video inventory that isn’t delivered as promised. Interesting, Extreme Reach, which purchased Sizmek’s video ads business last August, has just acquired BrandAds to provide video ads verification services designed to fight that problem.
Neil Nguyen, president and CEO, emphasized that the company is changing its direction, expanding and strengthening key areas with an emphasis on mobile and video offerings. its´ main goal now is to offer a platform through which clients can optimize the delivery of contextual ads across devices.
“We view this as a key component of our platform and mobile strategy,” Nguyen said.