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Strong advertising sales boost AOL revenue

Digital media and entertainment company AOL reported an 11.7 percent rise in quarterly revenue, as more advertisers used its real-time bidding platform to place ads on third-party websites..

The company's investment in programmatic advertising—the automated purchase of ads—is behind AOL's double-digit revenue growth, Chairman and CEO Tim Armstrong told CNBC's "Squawk Box" on Thursday.

"When you look at the transformation the industry is going through, you're seeing our revenue jump because advertising is getting mechanized by machines," Armstrong said. "There's going to be a structural change in the industry over the next couple years that will push revenue toward companies like AOL."

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Total advertising revenue rose 18.4 percent to $473.4 million in the third quarter ended Sept. 30, helped by the acquisition of video advertising platform Adap.tv and the increase in programmatic advertising.

Advertising revenue from AOL's third-party platform, which helps to buy and sell online ad spots through bidding via computers, jumped 44.3 percent to $215.1 million.

Armstrong said AOL, whose businesses include the Huffington Post news website and the TechCrunch blog, expects traffic to remain strong on its consumer sites in the wake of the midterm elections as audiences look forward to the 2016 election.

"You know what happens after the election cycle we just went through, which is the next election cycle becomes even more important," said Armstrong. "The traffic is going to go up."

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Net income attributable to AOL rose to $28.5 million, or 35 cents per share, for the third quarter ended Sept. 30, from $2 million, or 2 cents per share, a year earlier.

The company said revenue rose to $626.8 million from $561.3 million.

Analysts on average had expected a profit of 52 cents per share on revenue of $623.5 million, according to Thomson Reuters I/B/E/S.

Reuters contributed to this report.