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AOL: Pulling inventory from Ad.com?

fReport from Alley Insider that AOL is planning to pull ad inventory from Ad.com.

Not being on the inside for more than a month now, I thought several things when I read this:

  1. Everyone has seen how Tim is working to cut ad volume on AOL, focusing on ads with positive yield (e.g. get rid of worthless photo galleries and tons of ads below the fold).  This is super smart and if the point is simply that, with less ads, less are flowing downstream to Ad.com for remnant monetization, then yay, Tim.
  2. Will this decrease Ad.com’s reach?  It would be a bitter pill if Ad.com was no longer the biggest ad network.
  3. The talk of improved eCPM and yield in the comments is interesting.  Has decreasing volume to Ad.com really increased the sell-through rates of AOL inventory?  If so, is this simply a sales management problem and that is how they are addressing it?  Seems a little counter-intuitive, but it is possible.  Now, this makes a lot more sense if #1 is true and there are simply less worthless ad space on AOL.  (LIKELY)
  4. As Yahoo has refocused on putting their Class 2 inventory into places like Right Media, it is interesting to see AOL consider going the other way.  Furthermore, it is ironic to note that the original investment thesis behind AOLs acquisition of Ad.com those many years ago was that if they owned their own remnant monetization engine, it would be smart because they could keep their margin.  Deciding that AOL inventory should not be remnant monetized now is funny.  Particularly when many people acknowledge that AOLs acquisition of Ad.com was the best acquistion ever by AOL.
  5. AOL inventory was great differentiation for the Ad.com network.  Although maybe that was what devalued AOL inventory.

Net-net, I like what Tim is doing, although I am sure if Alley Insider is correct (UNLIKELY), then it sucks for my buddies at Ad.com.

Ad.com’ers that lurk here, comment away!

(As always, I want to note that this is not disparaging AOL, I love this.  Simply making industry observations.)

3 Responses to “AOL: Pulling inventory from Ad.com?”

  1. Turner’s Jacobs On Audience Buying; Agencies To Profit Share With Clients; IPO News; The Holiday Shopping Spree Says:

    […] Former AOL product guru, Brent Halliburton, looks at recent news that Ad.com may no longer be able to sell AOL inventory. Halliburton notes that this would make sense for AOL as it looks to gain control of its inventory and drive higher eCPMs but notes the irony: "The original investment thesis behind AOLs acquisition of Ad.com those many years ago was that if they owned their own remnant monetization engine, it would be smart because they could keep their margin." Read the post. […]

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