AOL sees huge opportunity in $5B online video advertising market

With only a fraction of advertising dollars being spent on digital ads, online video is a huge opportunity, Tim Armstrong, chairman and CEO of AOL, told analysts at the Deutsche Bank Media, Internet and Telecom Conference.

"I think you have to be excited about where the market is right now," he said in a presentation Tuesday morning. "Most businesses, if you are in front of an $80 billion market and only $5 billion of it is digital, I think that is a very significant opportunity."

Armstrong believes ad agencies this year will begin to shift "double-digit pieces" of their television ad budgets to online video.

AOL, which owns several online properties including Huffington Post and TechCrunch, has a big stake in the success of digital advertising. The company bought ad platform Adap.tv last August for $405 million, giving it a technology that Armstrong said puts AOL at the forefront of the linear TV transition by making it possible to run ad campaigns for both television and online platforms.

The company holds a good position in the online video space, placing third behind Google and Facebook in terms of unique video viewers, according to MarketWatch.

That belief in the impending shift from linear TV to online video viewing carried over to the SXSW Interactive conference in Austin, where Ran Harnevo, president of AOL Video, told Adweek that connected TV is "the last disruptive frontier" for the online video industry.

"Two things are still missing: one, open app source so that entrepreneurs can launch experiences into their TVs, the way it works in mobile; and two, better UI and UX [user interface and user experience]," he said.

Harnevo participated in a SXSW session along with Roku's Scott Rosenberg, vice president of business development content and services, to chat about evolving digital content and trends like binge watching.

For more:
- MarketWatch has this story
- Adweek has this story

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