New York-based Pictela, which was founded in 2009, provides a platform for distributing high definition branded content and advertising. It supports video, photos and applications in real-time in a range of formats and is used by publishers including Glam Media and Hearst.
AOL did not disclose terms of the deal but a report in The Wall Street Journal valued it at $20m.
Kate Burns, head of AOL Europe, said: "The addition of the Pictela team will further allow us to lead the way in providing our advertisers with beautiful, content rich, media display formats."
The acquisition comes ahead of the UK launch of the company’s new display ad format ‘Project Devil’.
The Project Devil ads have a larger format and incorporate photo galleries, coupons, video, Facebook and Twitter updates, offering a similar solution to the Pictela platform.
Currently AOL is serving an ad for the Nokia C7 handset in this format on its women’s website MyDaily.co.uk. AOL said it will be rolling out the format to all of its other UK properties over the first quarter of 2011.