In acquiring behavioral targeting newtork and technology Tacoda, AOL is vying to become a major player in ad sales across the Web
In purchasing one of the two biggest and oldest behavioral targeting providers online, Tacoda, AOL is increasing its reach into the general Web advertising world and rebuilding its crumbling fee-based empire on the ad model. Broken yesterday by The New York Post, whixh pegged the deal at between $200 and $300 million, the acquisition adds to AOL’s previous purchase of Advertising.com, another large ad network that serves behavioral ads. The blogs were abuzz with valuation speculation, but Reuters reports $275 million, accoridng to an insider. Tacoda’s network touches about 120 million users, and so AOL is demonstrating that it plans to re-build its lost empire of subscriber revenue on an ad model that reaches across the entire Web. Kate Kaye’s excellent analysis at ClickZ outlines how this follows AOL’s purchase of mobile ad network Third Screen Media and video ad technology Lightningcast.
AOL is positioning itself not only as a a big ad player but also one that like Yahoo could cater to the entertainment industry. Behavioral targeting currently occupies a small slice of the overall digital ad spend, but interest in it is growing and its use among entertainment marketers is strong. Behavioral targeting can tag visitors to a portal’s TV or film section as interested media consumers and then serve them relevant ads as they move “out of context” into other content areas. The Tacoda deal gives AOL even more reach out into the Web at large, so it can target ads at people even when they move off of the AOL.com property. For entertainment marketers, behavioral targeting could prove critical in finding enough ad inventory. As it is most TV and film areas at the major portals sell out far in advance and at high CPMs. At yesterday’s Behavioral Marketing Forum in New York, which I programmed (and blogged here), several ad executives mentioned the important of this platform for finding users when they are off the pricier entertainment portals. AOL is among the most important distribution hubs for movie trailers and TV clips and schedules. By tagging and following entertainment consumers here, AOL could be building a very Hollywood-friendly ad product.