Fast Chat: Tim Armstrong

Upon decent Q2 earnings, AOL's CEO talks video series, portal alliance,'s comeback

AOL announced quarterly earnings on Wednesday, and while the numbers weren't exactly stellar, there were numerous positive signs. Traffic is up, as are global ad dollars and video views. A confident-sounding Tim Armstrong took some time out to dig into the numbers, while touching on a number of other AOL and digital ad-related topics.

Adweek: With the still shaky economy, weak job growth and all that’s happening in Europe, have you seen any pullback in Q4 digital ad spending or any sense of client concern?

Armstrong: We are probably insulated because of the overall migration to digital. I think the offline guys are going to take more of the brunt. So, not really. In a silver lining kind of way, in ’08 you saw a lot of people stop spending, and they

realized it was a mistake. They’re probably realizing now that they have to keep up.

Your domestic display numbers were flat, but globally advertising showed some growth for AOL, and certain segments like ad networks and video are showing promise. What’s happening with display exactly?

Well, regarding display, we want it to be up. We’ve got our ad network business growing nicely when you’ve got heavy targeting, heavy data. We’ve got our sale force moving, and we’re better organized vertically. Things like video and Project Devil are gaining newfound traction. You see that underneath the display number. So we’re migrating our business to the strongest areas.

So does that imply that classic banner advertising is hurting?

There is a weakness in traditional display if you’re talking about ads that are not highly targeted. Not high-impact formats, that’s not particularly attractive to brands right now. In terms of video, we’re really looking at three different areas. Our video traffic is up over 100 percent year over year. We’re No. 1 in seven different vertical categories in video.

That’s interesting, given that a year or two ago people were speculating about being an old-school model that might be fading fast.'s been a real turnaround story. For example, we've increased our footprint to 30,000 publishers. We serve billions of impressions a day. It's really one of the best stories on the Internet. People were projecting it was going out of business a year ago.

Can any of that ad network strength be attributed to the sales alliance you have with Yahoo and Microsoft?

That's very small actually. That revenue grew quarter over quarter, but it's still small.'s growth we think was really about building out the full stack—being able to deliver video, mobile, Web, tablets all at the same time. And we're really focusing on targeting technology, and it just works. It's a high, high conversion product.

Do you think you'll get active in the acquisitions game in ad tech? People are wondering what’s going to happen to Right Media for example?

In terms of acquisitions, we don't have any big ones planned. We've hired a lot of engineers at, and we're probably the second largest company with an end-to-end solution after Google. I do expect there to be consolidation in that area, but we really have no plans.

One bright spot in today’s earning announcement was that traffic is up overall. What do you attribute that to?

Some of that is driven by HuffPo expanding internationally; some of that is Patch; some of that is our new verticals, like Makers, our new female-oriented site that has about 8 million uniques. But we've also really focused on improving core properties, like our  Moviephone app for example, and things like Mapquest and our homepage. We've been making sites faster, better, and core properties have been turning around, coming back or the decline has diminished significantly.