The recent tie-up between Microsoft and AOL has seen the two companies pool resources in an effort to rival Facebook and Google in the online advertising market. Microsoft and AOL are seeking to leverage what have become their strengths: content and programmatic, respectively.
AOL is to assume responsibility for the sale and management of display, video and mobile ads in respect of Microsoft ads, with a global remit. In turn, Bing, the Microsoft-owned search engine, is to replace Google when it comes to powering search results and ads on AOL sites. These changes are not expected to be implemented until January 2016, but both AOL and Microsoft have begun training each other on what is to come.
AOL’s barbell strategy, the phrase coined by CEO Tim Armstrong to describe the process of tying programmatic advertising and marketing services with data and analytics, will form part of the integration process. Microsoft’s own approach to sales, which involves tying brands into such platforms as Skype and Xbox, tends to have a heavy content focus.
The programmatic element of AOL’s approach was emphasised at the AOL Open Series on 28th July, with the release of a report showing a 9% decline in linear TV viewing for the first quarter in the US. Almost half of that fall could be attributed to the rise of Netflix. Dan Ackerman, head of programmatic TV at AOL, said the figures show just how important it is for advertisers to leverage data and automation.
Regarding the sales tie-up, Jim Norton, AOL Advertising’s global head of media, said that combining the best of what AOL has to offer with the best of what Microsoft has to offer provides the two companies with the opportunity to achieve scale and compete at the same level as Google and Facebook.
A recent comScore study into desktop search figures for the US market showed that Google enjoys a 64% share. In contrast, Microsoft’s share is 20%. However, when AOL sites switch from Google to Bing, that number could well change. After Yahoo replaced Google as default search engine for Mozilla’s Firefox in 2014, it experienced a surge in its share search, going from 9.6% to 29.4% over the course of a number of days.
