NEW YORK (TheStreet) --Verizon (VZ) - Get Report subsidiary AOL's CEO Tim Armstrong joined Monday morning's "Squawk Box" on CNBC to discuss the Facebook (FB) advertising situation and why video will play an integral role in how AOL and Verizon will be utilizing their marketing strategies.
It was reported last week that Facebook had been inaccurately reporting advertising figures on their videos. Consequently, not only did Facebook face backlash, the situation shed a brighter light on the methods of how bigger companies will choose to advertise in the future.
Regarding the inaccurate advertising numbers released by Facebook Armstrong says it illustrates how important video adverting has become.
"When you look at what Facebook is doing with video is they're using their platform for what it is. They're getting video in front of as many people possible, and that's a super important strategy for them. We've taken a slightly different strategy which is highly engaging and super brand-deep videos overall, and focus our brands around third-party brands," Armstrong explained.
Armstrong said that AOL had signed a partnership with American Family Insurance to publish deep-engagement, 360-degree video on the Huffington Post.
"So I'd say that they're scale and we're engagement, and I think that's our strategic differences," he added. However, does believe that companies can't move fast enough to invest in online video.
"There're 3.5 billion more people coming online, and they're going to mobile first. If you just invest in traditional ways of hitting them with video you're going to miss that entire market. The second thing is that the engagement rates when you have somebody with video with a great video piece of media, consumption rates are much higher," Armstrong noted.
He explained that AOL and Verizon are going to move towards brand advertising. That is when you see a multitude of videos or content as a consumer you are more likely to opt for brands you trust.
"We're trying to build the largest brands in the world that are trusted in media," he said.
Shares of Verizon were lower during early morning trading on Monday.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
TheStreet Ratings team rates Verizon as a Buy with a ratings score of B. This is driven by multiple strengths, which it believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks it covers. The company's strengths can be seen in multiple areas, such as its solid stock price performance, expanding profit margins and notable return on equity. The team feels its strengths outweigh the fact that the company has had sub par growth in net income.
You can view the full analysis from the report here: VZ