AOL, Banking on Video Ads, Buys for $405 Million's CEO says it's building "the most important business within the most important category" in digital advertising.

AOL, an early Internet brand that has morphed with the changing times, has announced a $405 million plan to buy, a self-described "programmatic video advertising platform."

AOL has invested heavily in the digital video space, with a focus on premium content. These investments, AOL said in an Aug. 7 statement, have made AOL On Network the second-largest recipient of monthly video content views in the United States for nine of the last 12 months.

"AOL is a leader in online video, and the combination of AOL and will create the leading video platform in the industry," AOL CEO and Chairman Tim Armstrong said in the statement.

"Two trends are prevalent in the video space right now—the movement from linear television to online video and the shift from manual transactions to programmatic media buying," Armstrong continued. " is positioned squarely in front of the huge opportunity these trends are presenting."

Amir Ashkenazi, CEO of, said his company is "building the most important business within the most important category" of digital advertising.

"We believe that most TV advertising will soon be traded programmatically on platforms like ours," Ashkenazi said.

AOL also announced second-quarter earnings results Aug. 7 that included 7 percent year-on-year growth in global advertising revenue and 8 percent growth in global search revenue.

"AOL continued to get leaner during Q2 while growing consumer traffic, growing all advertising revenue lines and improving our subscriber trends," Armstrong said in an earnings statement.

Yahoo, another early Internet brand, is in the process of reinventing itself and searching for growth where AOL has found it. Yahoo also understands the value of online video and, among other areas of investment, has been creating original video content.

Spending on digital video advertising this year is expected to grow 41 percent over a year ago, reaching $4.09 billion, according to eMarketer.

AdAge reported in a 2012 year-end wrap-up that audiences in 2011 watched online video ads 2.7 billion times. In 2012 (with still a few days to go) they'd watched ads 4.6 billion times.

ComScore announced April 25 that in March, Americans watched 39.3 billion online videos and that video ad views reached an all-time high of 13.2 billion. Google led the video-view rankings, with 154 million unique viewers, followed by Facebook, Vevo, Yahoo, Viacom, AOL and Amazon, respectively. In the online-ad video views, Google led again, followed by BrightRoll,, and Hulu, respectively.

Video ads, ComScore added, accounted for "25.1 percent of all videos viewed and 2.2 percent of all minutes spent viewing video online."

AOL's Armstrong added in his statement, "The founders and team are on a mission to make advertising as easy as e-commerce, and the companies together will aggressively pursue that vision."