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Advertising Week

Tim Armstrong Says AOL Is in the 'Best Position' to Fight Ad Blocking

String of acquisitions will keep it ahead

AOL CEO Tim Armstrong (r.) during his Advertising Week talk Wednesday Dianna McDougall

With the proliferation of ad blockers threatening to wipe out not only ads but also content from publishers' sites, AOL chief Tim Armstrong has every reason to be concerned. But during an Advertising Week talk today, he told a crowd of marketers that his company's reliance on advertising actually puts it in a good position to fight ad blockers.

"Any threat that ad blocking is doing is because people aren't innovating enough on ad formats and delivering value to consumers," Armstrong said. "We may have created our own problem, but we're also in the single best position to invent our own way out of that problem."

The "problem" Armstrong referred to is traditional display and video advertising, which AOL's media properties rely heavily on to make money. Those ads are easy targets for ad blockers and also include potentially annoying formats like mobile pop-ups.

"That space is just getting created for something to disrupt overall," Armstrong said. "Right now, that disruption is called ad blocking. In the future, it's going to have some company's name against it who redefines what ads look like and how they work. I hope that's our company, but somebody's going to do it. Ad blocking is a definitive signal to the industry that people need to get their butt into gear with innovation."

Armstrong has good reason to bet big on the future of ad-driven media after coming off a series of high-profile tech deals he said started 18 months ago when the media giant realized it needed to invest in companies to compete in mobile.

In May, Verizon acquired AOL for a whopping $4.4 billion, giving the telecom access to AOL's content, video and advertising businesses.

Then in June, AOL took over Microsoft's ad sales after the two companies started talking about a deal at CES earlier this year, Armstrong said.

With Microsoft platforms like Skype and Xbox, AOL's ad business grew to 500 million consumers, up from 200 million to 300 million prior to the deal, Armstrong said.

And in September, AOL bought mobile ad network Millennial Media for $238 million, giving it access to advertising on 65,000 apps.

Earlier this week, AOL hosted a massive event showcasing how those assets come together in Verizon's new go90 mobile video platform.

AOL is initially responsible for monetizing the service, which kicked off with a hefty $50 million investment from Publicis and its clients. In the next three to six months, AOL will take over all work for go90.

With the deals now cemented, Armstrong promised advertisers and agencies they'll soon see how they coalesce.

"We've done a lot of the spending and deals that we need to do," Armstrong said. "One of our goals as a company is to be best executing company in the space, putting the assets together [and] bringing them out to customers."

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