AOL, the struggling internet portal, is touting a new digital advertising unit called the IAB Portrait, which it hopes the broader digital media industry will adopt as a new standard.
On Tuesday, Hearst Magazines Digital Media, part of publishing titan Hearst Corporation, said it would become the first publisher to begin deploying the new display ad format -- formerly known as Project Devil -- using AOL's Pictela platform. AOL acquired Pictela, a two year-old New York City startup, for an undisclosed amount last December.
AOL's mission here is two-fold. First, the company is forging ahead with what might be called a "one-big-sophisticated-ad-per-page" strategy, which aims to make web advertising more competitive with television ads. Second, the company is hoping that the broader digital advertising industry will adopt the new unit and, of course, contract with AOL's Pictela division to serve it across digital properties.
"What we're trying to create is a format that can not only be distributed across AOL, but can also be distributed across the rest of the industry," Pictela CEO Greg Rogers said in a phone interview with Wired.com.
In February, the Interactive Advertising Bureau (IAB) named AOL's new ad unit one of its six "Rising Stars," as part of a competition to develop new digital ad formats to take advantage of the flow of ad dollars moving online.
The announcement by Hearst, a publishing giant, represents a milestone for AOL, because it's the first outside company to begin using the new unit, thus adding heft to AOL's push for widespread industry adoption. For AOL CEO Tim Armstrong, an ad man par excellence, the Hearst announcement was a long time in the making -- seven months to be exact.
AOL, where I worked before joining Wired.com last fall, launched Project Devil last September, acquired Pictela to serve the unit in December, and now, has signed up its first major partner, Hearst, which publishes several websites, including Cosmopolitan.com, Esquire.com, Marieclaire.com, and Seventeen.com. Consumer giant Proctor & Gamble is running tha new ad unit across Hearst properties. (See screenshot of Tide ad on Redbookmag.com above.)
"Pictela continues to create high-quality, innovative ad solutions that drive measurable results, and we're thrilled to be the first magazine company to offer these premium ad units," Kristine Welker, Hearst Digital Media's chief revenue officer, said in a statement.
Armstrong described Hearst's announcement as a "critical step in the aesthetic revolution across the Web, providing the best online experiences for users, publishers and advertisers."
The new ad unit is larger than traditional online web ads -- it takes up 33 percent of a given web page. But more importantly, it can accommodate a number of so-called ad "modules," including high-definition video, maps and social media feeds, all of which can be updated in real-time, Rogers said.
"If we're giving an advertiser 33 percent of the page, the advertiser is in essence becoming a publisher," Rogers said. "They're taking a lot of their content and publishing it to that one-third of the page. That means they need a platform by which to easily upload new content, reorder it, optimize it and publish it, just as if they were a publisher."
According to AOL, user engagement levels for IAB Portrait ads are "significantly higher" than standard rich media banners. Consumers spend 47 seconds more with an IAB Portrait ad and play 24 seconds more of video, the company said.
AOL is in the process of incorporating The Huffington Post, which the web portal purchased in February for $315 million, into its business. Arianna Huffington has assumed control of all of AOL's editorial operations.
On Wednesday, AOL reported that earnings fell 86 percent in the first quarter. Sales were down 17 percent on an 11 percent decline in ad revenue and a 24 percent decline in subscription revenue. In the first three months of the year, AOL, valued at nearly $200 billion over a decade ago, made a profit of $4.7 million.
One bright spot for AOL: domestic display advertising grew 11 percent.
See Also: - Huffpo’s Post-AOL Future
