AOL to Make Inventory Available on Yahoo’s Right Media Exchange

AOL,Yahoo and Microsoft recently became ad sales partners [1], with Yahoo electing to stick with its own ad exchange while Microsoft decided to work with AppNexus. AOL was the one partner that had yet to pick an exchange partner in the alliance.

As it turns out, perhaps surprisingly AOL has chosen to throw its lot in with Yahoo's, not Microsoft's exchange platform. The company has decided to make its non-reserved display inventory available on Yahoo’s Right Media Exchange (RMX). AOL took a seat on the exchange in December, said Brian Silver, Yahoo’s vp of ad platforms for the Americas.

The addition of AOL “helps to dispel some of the myths [around RMX such as the perception that] Right Media is so aligned with Yahoo that there’s this unfairness sort of occurring, and that’s not true,” Silver said.

Yahoo, AOL and Microsoft said in November that the three companies would share their nonreserved inventory via RMX and the Microsoft Advertising Exchange -- which is powered by AppNexus. Silver denied any impact from today's announcement on Microsoft.

The Yahoo, AOL and Microsoft partnership has been widely perceived as an effort to counter Google’s advertising exchange, but many expected that Microsoft’s exchange would emerge as the partnership’s primary platform with the possibility that Yahoo would sell or shut down RMX. Insiders in the ad tech world often heap praise on AppNexus' technology, while often criticizing RMX.

It is uncertain how today’s announcement may impact AOL’s Advertising.com, although the ad network holds its own seat on RMX. David Jacobs, svp of Advertising.com, said in a statement that the announcement "provides for Advertising.com to continue to access AOL inventory for our existing advertisers while providing increased competition through additional demand sources."

AOL chairman and CEO Tim Armstrong said, during a conference call with reporters following the company’s fourth quarter earnings release on Wednesday, that AOL’s advantage in the network and exchange space resides with “the machine-learning we do and have done with Advertising.com.”

“You can think of us probably as more of a Goldman Sachs-type player on top of the exchanges,” Armstrong added, “where we spend a lot of time, energy and technology trying to figure out the value of individual things being traded and we have a proprietary set of technologies around that.” However, it's certainly easy to see some buyers eschewing Advertising.com for Right Media's exchange, assuming the same ad inventory is available through both channels.

Armstrong also said during the conference call that AOL is beta testing an ad product with a partner that will “basically both help the ad exchanges as well as offer another version of non-reserved inventory for them, and we’ll go into more detail over that in this quarter.”