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AOL Buys Mobile Marketer Millennial Media For Roughly $240 Million
Purchase furthers AOL's positioning as global programmatic leader.
This morning, AOL announced that it was buying mobile ad platform Millennial Media for roughly $240 million. A deal had been rumored for the past couple of months as Millennial has struggled as a public company.
In addition to solving problems for Millennial, the deal gives the Verizon-owned AOL greater programmatic reach into mobile. More broadly, it puts Verizon squarely in the mobile-advertising business, something the company was unable to achieve on its own prior to the AOL acquisition.
According to the press release, AOL achieves the following pluses from the deal:
- A leading supply-side platform for app monetization with more than 65,000 apps to its publisher suite of offerings
- A significant mobile brand advertising scale across ONE by AOL
- Access to approximately 1 billion global active unique users and robust addressable and cross-screen targeting capabilities
- [An enhanced] mobile position in key international markets, including Singapore, Japan, the UK, France and Germany
- World-class engineering, sales and product talent who specialize in mobile
Data aggregator and forecaster eMarketer has reported that mobile ad spending will surpass PC spending this year, reaching just over $30 billion, while desktop ad spending will be just under $28 billion. The firm argues desktop ad spending “peaked” in 2013.
Mobile ad revenues are much more concentrated than desktop ad spending. Indeed, global mobile ad revenues are dominated by six or seven US-based companies, including Google, Facebook, Twitter, Yahoo, AOL (now) and a couple of others.
Mobile is projected to capture more than two-thirds of all digital ad spending within four years. Display advertising is surpassing search revenue in mobile, and programmatic will be the major way that mobile inventory is bought and sold. Hence the deal, which is expected to close this fall.
As is often the case, a major segment acquisition like this could trigger additional buying activity or consolidation as major networks and platforms attempting to compete to achieve greater scale and smaller platforms put themselves into play.