New York — Ailing Internet outfit AOL Inc., after making several acquisition during the past few months, on Thursday said it has scooped up New York-based digital advertising company Pictela Inc., the developer of a technology platform for serving and distributing high-definition display ads in an effort to bring magazine-quality photography to banner ads, along with the interactivity digital provides to attract more ad dollars from big brands by selling larger, glitzier ad formats.
AOL hopes the acquisition of Pictela, which offers a platform competent of injecting branded rich media such as video, photos and apps effectively into an assortment of online advertising and social media, will foster support to its suite of advertising tools for advertisers, agencies and publishers, including the company’s new Project Devil display advertising format — which it intends to roll out across all AOL Media sites by March 31, 2011.
The announcement of the deal, terms of which were not disclosed, but a person familiar with the matter said it was valued somewhere between $20 million and $30 million, is perfectly timed for the complete roll-out of AOL’s page takeover ad serving system Project Devil.
This acquisition is AOL’s fifth of the year, along with a string of purchases including StudioNow, 5min Media, TechCrunch and Thing Labs.
“Pictela is an excellent fit for AOL as we re-imagine the intersection of content, advertising and the consumer experience,” said Jeff Levick, AOL’s president of global advertising and strategy.
The acquisition is part of a bet AOL is making that it can carve a niche for itself as the Internet’s largest source of high-quality original content for brand advertisers. The purchase is also part of a huge transformation in AOL’s advertising strategy since Tim Armstrong took over as CEO in March 2009. Despite his years at Google, Armstrong has gambled AOL’s future on grabbing a big piece of brand advertising moving online, rather than the performance-driven, direct-response ads that still make up the lions share of the business. What is more, AOL’s ad business for years was bolstered by the results of Advertising.com, one of the Web’s original direct-response ads.
“What is in magazine advertising is high-quality, beautiful content — and the advertising is content, too,” said Levick. “Why should that only exist in magazines and not on the Web?” “We have taken one important step towards spotlighting quality ad content with Project Devil on AOL Media properties, and now we are taking a second by bringing Pictela into the AOL Advertising family.”
Established in 2009, New York-based Pictela creates ads that comprises of high-resolution video, photos, coupons and other related components that marketers can update in real time. The ads have appeared across a broad network of sites, including AOL, Yahoo Inc., Pandora, Hearst Corp. and Demand Media.
“Pictela’s product development team is superior-in-class, and its delightful, content rich, media display formats meet Interactive Advertising Bureau (IAB) and Online Publishers Association (OPA) standards that run across AOL Media properties and other publisher sites.
One-year-old Pictela will retain its brand and continue to execute its operations as a separate entity within AOL Advertising. In addition to complementing Project Devil, the company will be expected to continue working with outside clients.
AOL is leaning heavily on Project Devil, its ambitious effort to give its sites a face-lift — and remake the ads on the page to be larger and more interactive. That is starting to pay dividends with early results, according to Levick, with Project Devil ad units drawing from 3-20 times the engagement of standard banners. “We have created a better wrapper for consumers not to be blind to banners but to engage with them,” he said.
“We believe in an essential redesign of brand marketing on the Web,” says Levick. “We shared the same DNA (as Pictela) and thoughts about where the industry should be going.”
AOL is in need of more ad dollars. The company has been grappling in its attempts to transform its business from a subscription-based service for connecting to the Internet to an ad-supported digital media company. AOL was already a Pictela partner, as are Microsoft, Yahoo, Time Inc, Conde Nast, Glam Media, Demand Media and plenty of other publishers.