Market Insight

AOL moves into UK market with local shows and programmatic inventory

October 20, 2014  | Subscribers Only

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AOL, the advertising-supported online content platform, has stepped up its activity in the UK market. At a digital upfront event in London last week, the platform emphasised its technological and content investment specific to the local market, highlighting its work in programmatic advertising as well as content made for UK audiences.

Programmatic advertising - the automation of advertising workflows and advertising transactions - is an arena where AOL has invested heavily, most notably with its acquisition of, the video programmatic platform, in 2013. By stressing its use of this technology, the firm has pushed a developing technology forward in the UK market where it currently lags behind the US, at 38.4% of online advertising revenues (vs. 42.2% in the US).

Alongside the stress on automated ad-buying, the UK digital fronts showcased AOL’s new unscripted local content. The platform will make two original short-form UK shows with production company 40 Partners. Being Mum, a parenting show starring Rochelle Humes, and Thirty Something, about celebrity success stories and starring Richard Bacon, will likely premiere in the first half of 2015. These productions will be offered alongside US content re-commissioned for a second season, including Park Bench with Steve Buscemi and City.Ballet. AOL has also commissioned its first US long-form series, Connected, a reality format where participants film their own lives. The shows, many of which are 12 episodes long, will be released in bundles of three or four episodes at a time – a technique which the platform believes works effectively for short-form video.

The firm also showcased partnerships enabling the platform to carry other producers’ local content. Among others, AOL will host factual and news from broadcasters Channel 4 and Scripps International, viral short-form from MCNs Barcroft Media and Little Dot, and repurposed library content from British Pathe. 

Our analysis

Advertiser-focused TV upfronts have a long history, and even digital upfronts are nothing new - the Digital Content NewFronts have taken place in the US for two years. However, the UK event highlights a growing trend for localising online content. Naturally, online networks with strong US presence begin to focus efforts for customers and advertising in new territories; in some (but not all) cases, those new territories are in Europe. Since 2013, several subscription video-on-demand (SVoD) networks have begun content commissioning and/ or co-production in non-US territories, not least Netflix, with UK production The Crown.

But AOL is not a subscription service, and this is the first step for shorter-form ad-funded content following its SVoD compatriots into new territory. The different funding model means there must be a close tie between advertiser needs and content creation; such a link was clear when new content was previewed at an advertiser-focused event.

The online company eagerly highlighted its digital capabilities through and partnership with RealEyes, an emotions-measurement company, at the upfront event. However, despite AOL's focus on programmatic buying, which promises to deliver to advertisers audiences aggregated through online-specific rather than traditional data segmentations, the UK-produced AOL content appears to be just that: content created to target specific demographics.With Being Mum and Thirty Something, the audience is highlighted in the title, in a traditional, TV-like manner. This suggests that the programmatic offering is not convincing and not yet sufficient to advertisers and agencies.In order to compete for the TV ad dollars, pounds and euros, in addition to providing the online tools, online content production will need to converge rather than diversify from TV.

Talent-driven short-form series are, as with US production, the main way which audiences are being approached. From Crackle's Comedians in Cars to Amazon’s Alpha House, celebrity-led digital content is a tried and tested way to attract audiences to a new platform.

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