During a keynote and chat with AOL’s Tim Armstrong at IAB MIXX in NYC Tuesday, the chairman and CEO revealed how AOL plans to mitigate disruption occurring in the digital landscape. Key to that strategy is adjusting to a data-driven digital landscape and cultivating a diverse talent base.

“The changes in advertising today are driven by data,” Armstrong said. “Data is the new oil,” and “every single one of us in an oil pump.” AOL is thinking seriously about how to “build media properties on the fly” by leveraging data in real time, he said. By 2015, the company will be making a trillion ad decisions every day in its systems—that’s up from 300 million per day in 2004. Clearly, humans alone can’t keep track of the information. “Machines are going to play a more and more important role in that environment,” he said.

To an extent they already do. Programmatic advertising has grown from 4% to 34% of AOL’s revenue in a single year (2013-2014).  “This is a massive change for us,” Armstrong acknowledged. “We have to transform our company to deal with this amount of data change overall.”

The other portion of the transformation equation involves cultivating talent. Armstrong and IAB today announced the formation of the IAB Education Foundation, a nonprofit “devoted to the improvement of the talent pool in our industry and the building of diverse employment,” said Randall Rothenberg, IAB’s president and CEO. It will focus on training and development in terms of racial, ethnic, gender and economic diversity, he said, with Armstrong serving as its chairman. “We simply have to change” the current state of diversity in the digital industry. “It’s the right thing, it’s the moral thing to do,” Rothenberg said. It also makes good business sense. “If you want your company to do well, you have to move to where people are going to,” he said.

As AOL evolves in the coming years, Armstrong said it’s important to maintain “the willingness to disrupt yourself”—before you yourself are disrupted. “That’s what’s needed for companies to transform. Fundamentally, everything has to be rebuilt.”

 

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