Mass media company AOL is continuing to vie for digital advertising market share. The company’s latest move is a $238 million bet on Millennial Media, an end-to-end mobile platform.

With Millennial Media, AOL adds a leading supply-side platform for app monetization with over 65,000 apps to its publisher suite of offerings, as well as significant mobile brand advertising scale. The buy gives AOL access to about 1 billion global active unique users as well as addressable and cross-screen targeting capabilities.

“AOL is well positioned as consumers spend more and more time on mobile devices, and as advertisers, agencies and publishers become more reliant on programmatic monetization tools,” said Bob Lord (pictured), president of AOL, which Verizon recently acquired. “As we continue to invest in our platforms and technology, the acquisition of Millennial Media accelerates our competitive mobile offering in ONE by AOL and enhances our current publisher offering with an ‘all in’ monetization platform for app developers.”

Improving AOL’s Chances

That’s all true, but will it allow AOL to make inroads against Google and Facebook on the mobile ad front? According to eMarketer’s latest U.S. ad spending forecast, catching Google and Facebook will be no easy task. Microsoft, Yahoo, and Twitter are also beating out AOL on the digital ad revenue share front.

The numbers from eMarketer show Google owns 32.9 percent of mobile ad revenue in the U.S., or nearly $10.02 billion, while Facebook owns 19.4 percent, or nearly $5.9 billion. By contrast, Millennial Media captures 0.3 percent, or $101.2 million. That’s a proverbial drop in the bucket by comparison.

“To be a serious player in the mobile display ad market, media companies need to offer advertisers scale, robust audience targeting and sophisticated measurement tools. AOL will gain ground in two of those areas through its purchase of Millennial Media,” said eMarketer analyst Cathy Boyle in the report.

“The acquisition will expand the breadth and depth of the in-app display ad inventory AOL can offer advertisers, which will help those advertisers achieve greater scale,” according to Boyle. “In addition, the publisher will gain the mobile user profile data that Millennial Media has been amassing for years, which will help improve AOL’s ability to find and target specific audiences on mobile devices.”

AOL’s Pitch to Marketers

We caught up with Greg Sterling, vice president of strategy and insight at the Local Search Association, to get his thoughts on the eMarketer report. He started with the obvious: Google and Facebook dominate the mobile advertising market.

“Revenues are incredibly concentrated in a small number of U.S.-based firms. AOL’s Millennial Media acquisition will help with mobile advertising and its overall ad story but I agree that it will be challenging for the company to grab more mobile ad share,” Sterling told us. “AOL’s pitch to marketers, however, will not be about mobile but about the company’s combined desktop and mobile reach and targeting capabilities.”







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