AOL Q4 revenues up 5pc as programmatic ads vision comes to life

11 Feb 2015

Tim Armstrong, AOL chairman and CEO

Online media giant AOL has just reported total fourth-quarter revenues of US$710.3m, up 5pc on last year. The company’s focus on programmatic ads is working and AOL saw a 66pc jump in profit to US$59.6m.

Overall for the year, AOL Platforms surpassed US$1bn in revenue, swinging into profit.

Total revenues for 2014 surged past the US$2.5bn mark, up 9pc on last year.

The company’s focus on programmatic advertising is paying off, growing 250pc in 2014.

“AOL’s global team delivered our second consecutive year of growth in revenue and profits – while we lowered our expenses,” said Tim Armstrong, AOL chairman and CEO.

“AOL is building leading assets in the fastest-growing areas of media technology and we are aggressively moving the company forward in 2015.”

Programmatic for the people

In the fourth quarter, AOL said it saw a 16pc increase in third-party properties revenue, which has been driven by the growth in premium formats, including video, across its programmatic platform.

It saw a 6pc decline in revenues from AOL Properties; including the loss of US$12m in revenue from the disposal of brands, including its local news service Patch.

Subscription revenue declined 5pc in the quarter but 6pc growth in average revenues per user (ARPU) offset an 11pc decline in subscribers.

Traffic acquisition costs increased US$32m but this was offset by reduced headcount at the company.

During the quarter, AOL cut its expenses by US$2m by cutting marketing spend.

At the end of the quarter AOL had war chest of US$489m.

Tim Armstrong image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years