AOL Confirms It Is Shopping for Millennial Media In $238M Deal To Broaden In Cellular Advertisements

AOL Confirms It Is Buying Millennial Media In $238M Deal To Expand In Mobile Ads

This simply in: AOL, itself acquired by Verizon for $four.four billion earlier this yr, has introduced that it’s making one other buy of its personal. It’s shopping for Millennial Media because it continues to construct out its presence in digital promoting and particularly cellular advertisements. AOL will probably be paying $1.seventy five/share for publicly-traded Millennial, understanding to an enterprise worth of $238 million after accounting for debt.

TechCrunch first broke information of the approaching deal in July.

Whereas a whole lot of AOL’S — and the broader business’s — M&A spotlight in current occasions has been concerning the acquisition of advert tech instruments to additional increase in areas like programmatic promoting and ensuring that advertisers are getting the most important bang out of the info they’re amassing about on-line shoppers, a flip to Millennial Media is in a approach a reminder of one of many extra fundamentals features of the internet advertising recreation: quantity, quantity, quantity.

The deal will give AOL a a lot greater footprint in cellular promoting, with Millennial’s community overlaying some sixty five,000 apps and 1 billion lively customers globally in markets just like the U.S. but in addition Singapore, Japan, UK, France and Germany.

“AOL is nicely positioned as shoppers spend increasingly time on cellular units, and as advertisers, businesses and publishers grow to be extra reliant on programmatic monetization instruments,” stated Bob Lord, President, AOL, in a press release. “As we proceed to spend money on our platforms and know-how, the acquisition of Millennial Media accelerates our aggressive cellular providing in ONE by AOL and enhances our present writer providing with an ‘all in’ monetization platform for app builders.”

“By becoming a member of AOL, we shall be including further cellular experience to AOL’s rising know-how belongings,” stated Michael Barrett, President & CEO of Millennial Media, additionally in a assertion. “I’m excited by what this acquisition means for our shareholders, our staff and our companions.”

That is additionally a part of a much bigger technique for AOL and its proprietor Verizon. When the service acquired AOL, executives on the corporations famous that monetizing and additional rising Verizon’s huge cellular viewers — it was already one of many world’s largest cellular operators — was one of many fundamental causes it was keen on AOL, which already had developed an promoting community that ran throughout each websites owned by AOL in addition to these owned by third events (TechCrunch is certainly one of AOL’s properties). Shopping for Millennial to increase that to but extra third events expands that technique even additional.

For Millennial’s half, whereas the corporate — one of many older cellular advert companies — had developed an in depth promoting community, some critics believed that the corporate had not likely stored up with greater improvements in advert tech. When it went public in 2012, the corporate popped with an eye fixed-watering valuation of $2 billion, a far cry from its sub-$300 million valuation in the present day. In that regard, coming along with an organization like AOL to wrap extra advert tech round its community additionally makes some sense.

The cellular advert market continues to be a comparatively small a part of the broader digital advert business, however with shoppers’ massive swing to utilizing smartphones and tablets as their sole computing units, that is quickly altering, with a variety of that transfer being fuelled by improvements in advert tech.

AOL cites figures from eMarketer that say sixty nine% of cellular advert spend might be purchased and bought programmatically (understanding to over $14 billion), with programmatic video will attain $four billion by 2016. It additionally notes figures from Cowen & Firm that word cellular show and video promoting revenues in 2015 at $three.eight billion and rising to $9.2 billion in 2018.

AOL says the deal is predicted to shut this fall, topic to regulatory approvals.