NEW YORK (TheStreet) -- One-time dialup Internet provider AOLa aheld it's second annual "programmatic upfront" on Monday, all a part of establishing CEO Tim Armstrong's companyaat the forefront of theanew technologies remakingaadvertising, especially online video and display ads. But AOL doesn't want to just become advertising agency's partner in instantly placing hundreds of online advertisements with the swipe of a few keystrokes. The owner of Huffington Post and TechCrunch wants to do the same withatelevision, which has been conspicuously reluctant to use programmatic platforms -- sophisticated computer systems that match marketers with online publishers and network operators -- to sell commercial space. To highlight is second programmatic upfront -- a play on the television industry's annual spring ad-selling upfront -- AOL said it had secured anaexpanded partnership with ad giant Publicis Groupe to encompass not only digital videoabut also traditional television ad spending. Read More:aHow Online Ad Exchanges are Making Inroads Against TV Networks Likewise, Havas Media Groupasaid it broadened its relationshipawith AOL to include TV buying, leveraging AOL's newly-announced measurement tool for the medium (which pairs audience data for specific TV programs with brands' consumer data via AOL's online analytics database). Led by Armstrong, the former Google advertising executive, AOL has invested more than $400 million over the past year remaking the company as an high-tech advertising platform, its most recent purchase in Convertro, a marketing analytics company. With a market capitalization of $3.5 billion, AOL is far larger than pure-play programmatic stocks such as Rubicon Projecta or YuMea .a Armstrong is hoping these investments prove to be a smart decision, moving quickly into an area which has seen increasing interest among advertising circles. At Advertising Week this year, the annual four-day industry conference held mostly around New York's Times Square, the topic was covered in a series of hour-long discussion panels whereas just a year ago, programmatic TVawas little more than a niche topic that received scant attention. "Customers are changing the way decision processes are happening," said Armstrong at the event. "We're going from media upfronts to technology partnership upfronts. When you talk about upfronts in the future it will be more and more about technology." AOL aims to bridge programmatic with more traditionalaforms of buying and selling advertising. Programmatic offers tech-savvy companies a chance to cut into a lucrative industry. Revenue from programmatic is estimated to reach $21 billion globally by year's end, up 52% from a year earlier, according to Magna Global forecasts. The momentum is expected to continue, an estimated 27% annual growth rate to compound to $53 billion by 2018.a Read More:aFacebook's Media Planning Tool is Like Giving Money to Murdoch This next step in programmatic will open AOL up to a revenue stream in what is the largest marketing expenditure for U.S. advertisers. Currently, the U.S. broadcast and cableaad market is nearly $70 billion annually. That market will grow an average 3.5% year on year to $78.64 billion by 2018, according to eMarketer estimates. AOL wants a cut of that market and is appealing to advertisers wanting to better target their TV marketing plans. Traditionally, the market has only been measured by age and gender -- with third-party data drawn from multiple sources, advertisers can better pinpoint their desired market. "It's been bought and sold the same way for decades... We haven't adapted," said Dan Ackerman, AOL's head of programmatic TV. "Today, 85% of the impressions consumers are seeing on television are only reaching 40% of the target audience." Read More:aWhy Time Warner Is Aggressively Plowing Ahead With More Job Cuts Content providers have at times been hesitant to enter the field of programmatic, fearful their breadth of premium content would be undermined by bargain-basement pricing in the bidding process. But for this next frontier in programmatic, AOL thankfully already has one major network in its corner. "It's clear [we need] to enable the technology to help us really address what our clients need in a better, different way than we've done historically," said Linda Yaccarino, NBCUniversal's head of ad sales. --Written by Keris Alison Lahiff in New York.a
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