AOL said Tuesday that it has acquired video-content provider 5min Media under undisclosed terms. According to 5min Media, the provider's delivery platform lets online advertisers reach a targeted audience of tens of millions in specific categories by making a single buy across consistent video content.
AOL expects the deal to significantly expand the global content network's appeal to advertisers while further enhancing the distribution and monetization of AOL-produced original video content throughout the web, noted AOL CEO Tim Armstrong.
"5min Media is the perfect complement to our powerful video capabilities," Armstrong said. "It provides a missing piece in the AOL value chain that completes our end-to-end video offering from content creation through syndication and distribution to the consumer experience."
Building for the Next Decade
The 5min Media acquisition complements the StudioNow platform AOL acquired in January, giving the company the ability to create and distribute video online in a cost-effective and scalable way -- both for AOL as well as third-party publishers.
"Our acquisition of 5min Media is the latest in a number of steps we have taken this year to better position AOL to capture the growing video opportunity on the web," Armstrong said. "We are building a video ecosystem for the next decade."
Though AOL already had a commercial agreement with 5min Media for the network's sites to integrate 5min content, Armstrong noted that the acquisition will let the company add even more videos to its web pages. "Importantly, we'll also be able to identify video content holes among our sites, tap our StudioNow capabilities to fill those needs, and create a truly 'demand informed' video library," Armstrong said.
According to 5min Media, its video-syndication platform was generating more than 160 million unique video views per month before AOL's acquisition. However, this pales in comparison to the nearly 3.6 billion video ads that Americans viewed online in July, with Hulu alone generating 783 million video-ad impressions, according to comScore.
Matching Ads To Content
Headquartered in New York City, 5min Media maintains a library featuring more than 200,000 categorized, tagged and rated videos. Using a proprietary semantic technology called VideoSeed, the company contextually matches the most relevant library videos with the partner site's text content in a range of popular online categories, including home, food, beauty, fashion, health, travel and pets.
According to comScore, 84.9 percent of the U.S. Internet audience viewed online videos during July, with ads accounting for 9.8 percent of the total. However, content duration averaged just 4.8 minutes per view, with video ads averaging a mere 0.4 minutes, the web-metrics firm said.
Nevertheless, demand for longer-form content continues to rise as more Americans gain access to broadband and become comfortable viewing video online. "With viewership of long-form content on a rapid upward trajectory and its addressable audience representing more than 80 million Americans, we are clearly in an era of significant opportunity for the online video-advertising market," Tania Yuki, the manager of comScore's video-metrics program, noted in a blog.
A recent Nielsen study indicated that running full-length video programs online should help advertisers. "Video ads run during online full-episode TV programs yield deeper brand impact than corresponding on-air TV ads, with the difference most pronounced among younger viewers age 13-34," Nielsen researchers said.