AOL Urges Industry to Embrace Programmatic Buying

But 'upfront' falls short on urgency, big deals

AOL wants to go fully programmatic. The big open question is, does anyone else?

And furthermore, what happens when you throw an upfront without offering anything concrete for sale?

Those were some of the questions coming out of AOL's Programmatic Upfront, which was billed as an "historic" event for the online ad industry, kicking off the 10th annual Advertising Week in New York. In an elaborate, heavily staged sales pitch, AOL executives exhorted the industry to embrace data, adopt automated ad buying and cut out the middlemen.

AOL officials, as they did in announcing the upfront over the summer, cited research contending that 50 to 60 percent of online ad dollars regularly go to middlemen. The underlying message at Monday's upfront was: ditch the middlemen and use AOL's ad tech platforms instead. (It's worth nothing that in preaching simplicity, AOL listed 10 different ad tech products of its own.)

Otherwise, the two-hour-plus affair was mostly an extended pep rally for data and machines—all in the name of moving the Web toward "becoming a $100 billion market," in the words of AOL CEO Tim Armstrong. AOL did announce that starting next year, it would begin selling its top inventory programmatically, letting brands cherry-pick audiences using their own data via AOL's premium ad placements.

Plus, AOL plans to work with other private exchanges and sell desktop, mobile and tablet ad inventory together. "This is us putting our money where our mouth is," said Seth Demsey, AOL's svp of global advertising products and strategy. "You asked us for this."

That assessment remains in question. More than one buyer attending the show called a programmatic upfront "an oxymoron." 

"When you talk about real-time and programmatic, and upfronts that's where I get lost," said an attendee.

AOL is working hard to dispel what it says are myths: that programmatic is about cheap remnant inventory, and that brands don't need to buy online ads ahead of time. In fact, it says it has commitments from the agencies Accuen, Amnet, Havas, Horizon and Magna Global, as well as interest from Digitas LBI and others. But the company was notably short on specifics and dollar amounts.

Given that in the TV world, upfronts are about presenting specific content that is available for sponsorship within months, AOL's upfront was noteworthy for doing nothing of the sort. Instead, a long list of presenters spoke enthusiastically about looking to eliminate the busy work inherent in online advertising—a theme that has pervaded at least the last five Advertising Weeks.

A team from Digitas preached programmatic, but then presented a campaign featuring a Fantasy Football contest tied into a fictional character from The Onion that blended Web video and social media.

Rene Rechtman, CEO/svp, Be On & AOL Networks International, presented a long-form video ad for LG featuring dancing and household appliances, billed as an example of "branded programmatic." A doctor touted the value of deep breathing. Video interviews with Daryl Morely, the general manager of the Houston Rockets, and Kevin Spacey of House of Cards echoed the value of data—something likely not lost on a heavy digital ad crowd. 

In addition, the political data science whiz Nate Silver spoke about the need to sort through endless streams of data to find the signal above the noise. And Grammy-winning musician Imogen Heap told of how technology pushed her to be a more creative artist.

However, it was tough to see how all these presentations would incite buyers to purchase more inventory on AOL's Kitchen Daily or Moviefone on an annual upfront basis. 

That didn't stop Bob Lord, the new CEO of AOL Network, from being ultra-confident. "This is a movement, and the moment."