AOL Buys Pictela

AOL has sold a lot of banner ads over the years, but even it would agree that most of them have been ugly. It hopes to change that with its newest ad units.

The company has scooped up tech company Pictela in an effort to bring magazine-quality photography to banner ads, along with the interactivity digital provides. Terms of the deal weren’t disclosed. The acquisition is AOL’s fifth of the year, along with StudioNow, 5min Media, TechCrunch and Thing Labs.

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.

“What’s in magazine advertising is high-quality, beautiful content—and the advertising is content, too,” said Jeff Levick, AOL’s president of global advertising and strategy. “Why should that only exist in magazines and not on the Web?”

Pictela was founded in 2009, in order to deliver high-quality brand content in display ad units.

The purchase is also part of a huge shift 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 lion’s share of the business. What’s more, AOL’s ad business for years was bolstered by the results of, one of the Web’s original direct-response ads.

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’s 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’ve created a better wrapper for consumers not to be blind to banners but to engage with them,” he said.

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