How AOL has quietly become a digital video powerhouse

Publicly, AOL struggles to shake its reputation as a floundering Web giant. But investors have a reason to be bullish: The media company has recently constructed one of the strongest digital video operations on the Internet.

After the 2013 debut of AOL Originals, the company’s second slate of Web series is beginning to materialize. The 16 new and returning shows feature plenty of familiar faces: Sarah Jessica Parker, Steve Buscemi, Nicole Richie, James Franco, Gwyneth Paltrow, and Hank Azaria, among others. The formats are familiar, too, with most shows sticking to reality TV and documentary techniques. AOL says the thematic through-line across its original programming is “authentic voices and remarkable storytelling.”

But there’s an even more apparent commonality: well-established names. That makes AOL’s programming suite very attractive to advertisers looking to move more dollars over to digital.

“Every piece is in unison, from talent and production to distribution, monetization, and measurement,” Paul Kontonis, executive director of the Global Online Video Association, told Digiday. “This is TV content, packaged up for digital distribution in a complete way, so the TV buyers and the people who’ve got a lot of money to spend on media, it’s a really simple choice for them. No one else is going with such a large slate of original programming, so completely packaged.”

AOL has a sizable audience across its own properties, but its massive video distribution network is its key to attracting advertisers. The company has over 2,000 publisher partners that help its growing AOL On video library rack up over 1.2 billion views a month, according to Frank Besterio, vp and head of business development at AOL Video.

“Obviously, we want people to engage with AOL for access to our originals, but at the end of the day … we’re putting our programming within sites that are relevant to the audience we are trying to reach,” said Besteiro. “Take something like [Nicole Richie’s short-form series] ‘Candidly Nicole’: It doesn’t make sense on The Weather Channel, but it will certainly get views on Refinery29 or Conde Nast’s The Scene.”

Using tech from measurement firm Nielsen, AOL and its advertisers can break out demographic data for all video content served through AOL On, the company’s video platform. AOL wants its advertisers to treat digital video with the same respect as TV, so comprehensible metrics are essential, said Besteiro.

AOL Video generates most of its revenue from pre-roll ads, but it also has a sizable branded content business. The same department responsible for its original videos also produces content for advertisers including Capital One, Delta and OnStar.

“The people we had working on our slate [of original content] are storytellers, video people, and they can really straddle the fence,” said Nate Hayden, AOL’s vp of originals and branded entertainment. “When you have huge success on your originals side, advertisers come to you and say, ‘We like your content, we want something similar.’ Whether that’s a special, like the [OnStar] unboxing, or a 12-episode series depends on what they’re looking for.”

What is ubiquitous among them, though, is their desire to be on the AOL platform. It’s not as big as YouTube, but it’s a safer buy for brands because the content, scale, and measurement is far more predictable.

“AOL has been putting together each piece of the puzzle, diligently,” said Kontonis. “Everyone needs to look at every aspect of their strategy and look at what the new standard is going to be.”