AOL L.L.C. continues to lose ground online as Google Inc’s dominance grows, but the venerable Internet company is gaining impressive traction in mobile.
Virgin Mobile USA Inc. last week unveiled a deal to use AOL’s Platform-A as its exclusive display advertising and sales partner for
the mobile virtual network operator’s mobile Web inventory, delivering banner ads across Virgin Mobile USA’s deck. The news marks the second win in as many months – Platform-A scored a similar deal with Verizon Wireless last month – and gives AOL access to Virgin Mobile USA’s five million subscribers.
“Working with Virgin Mobile USA, we can help advertisers expand their mobile marketing efforts and effectively engage the 14- to 34-year-old market,” Platform-A President Lynda Clarizio said in a prepared statement.
The Verizon Wireless pact grants exclusive rights for Platform-A to guarantee placement to advertisers within the carrier’s online and mobile Internet properties; other sales partners can sell only on a blind-network basis, which means marketers have no control over where their ads run. The Virgin Mobile USA deal, on the other hand, covers only the wireless Web but makes Platform-A the sole ad partner.
Pay off
Platform-A is the result of a billion-dollar spending spree that saw AOL snap up the mobile pure-play Third Screen Media as well as online players Lightningcast, AdTech, Tacoda, Quigo and Perifilliate. The new acquisitions have been integrated with Advertising.com, an ad network AOL snapped up in 2004 for $435 million, with the goal of becoming a one-stop shop for advertisers looking to spread their messages online and in mobile.
The fusion of so many parts hasn’t been easy: Platform-A has missed sales targets, according to news reports, as the business units have had trouble working together, and Curt Viebranz was dismissed as president earlier this year in favor of Lynda Clarizio, who had overseen the Advertising.com operation. The chaos has compounded problems for a struggling AOL that ranks fourth among the major Web portals in ad revenue.
Perfect match
But Platform-A’s recent mobile deals have sparked at least a glimmer of optimism. While Virgin Mobile USA is dwarfed by its tier-one competitors, the company’s subscriber base may be especially fertile ground for mobile advertising. The MVNO targets teens and young adults – the sweet spot for interactive advertisers – and has gained impressive traction with Sugar Mama, a program that rewards users who opt to receive mobile ads. More than 700,000 users have signed up for the 3-year-old service, according to Virgin Mobile USA, agreeing to watch online pitches and participate in surveys in exchange for additional airtime.
“By taking concrete steps to improve the ad-viewing experience for its consumers, Virgin Mobile is signaling that it is a dynamic player and is willing to adapt to the existing mercurial nature of the wireless space,” Current Analysis analyst Deepa Karthikeyan noted in a report. “The deal also bodes well for AOL, who is reeling under the losses of its Internet business. … This announcement also strengthens AOL’s mobile marketing standing and provides it with some much-needed ammunition as it battles the onslaught of its online rivals Google, Yahoo and Microsoft in this domain.”
