AOL deal may power Verizon’s soon-to-debut video streaming service

With its acquisition of AOL, Verizon has a big opportunity to deliver hyper-personalized video ads to an increasingly mobile audience. But the AOL deal also could play a powerful role in Verizon’s soon-to-launch video streaming platform, OnCue.

Verizon acquired Intel’s flailing video streaming platform OnCue last year and is reportedly launching the platform this year.

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That acquisition, and the timing of the launch, may prove prescient. Viewers are increasingly moving away from television to mobile and desktop. Video is also a huge driver of sales; earlier this year, AOL released a study showing that YouTube was the strongest social media platform for introducing new products and closing sales.

AOL has spent the past several years building up its ad-tech business through strategic acquisitions, like video ad marketplace adapt.tv, ad sale attribution startup Convertro, video marketing platform Vidible, and personalization tool Gravity. Using those acquisitions, plus its own in-house ad products, the company created One by AOL, a programmatic ad platform that supports ad-buying for display and mobile, audience management, and data analytics in one place.

One is a solid tool that generated $1.8 billion in ad revenue during 2014 — respectable on its own, but tiny in comparison with Verizon’s $31.9 billion in revenue in Q1 of this year alone. That just goes to show how the telecom giant could scale AOL’s ad tech business. In the hands of Verizon, One could provide a great way to earn additional revenue on the carrier’s more than 100 million customers.

But there’s also potential for Verizon to use AOL’s ad tech to help it monetize its promised video streaming platform.

“The real, ultimate value of programmatic video advertising sale for an on-demand video stream is personalization of commercials. If you can achieve that, then you can go more premium, perhaps, and charge more for your ad slots, since they are then potentially targeted against demographics, context, personal viewing history, and even the behavior and purchase graph of viewers,” says John Koetsier, VP of research at VB Insight (VentureBeat’s research arm).

In addition to AOL’s various consumer-tracking tools, Verizon also has a lot of its own customer data including details about user location, app usage, and browsing habits. Already the carrier is selling its consumer data to third parties, according to reports earlier this year. Using that information in tandem with AOL’s tracking data could turn Verizon’s consumer insights into an incredible ad platform capable of intense personalization.

Paired with Verizon’s upcoming video streaming service, the wireless carrier may be able to drum up some nice sales — making that $4.4 billion it’s paying for AOL well worth it.