AT&T to Acquire Digital Ad Firm AppNexus for $1.6 Billion -- Update
June 25 2018 - 9:04AM
Dow Jones News
By Lara O'Reilly
AT&T Inc. said Monday it has agreed to acquire advertising
technology company AppNexus, a deal that could help the telecom
giant capitalize on the media content it added through its purchase
of Time Warner Inc. and give it more firepower to take on Google
and Facebook for digital advertising dollars.
Terms of the deal weren't disclosed. The Wall Street Journal
reported last week AT&T was expected to pay around $1.6
billion, according to people familiar with the matter.
AppNexus offers technology that helps advertisers buy ads, using
automated software, across a range of websites and apps. The
company also supplies technology to publishers so they can manage
and sell ad space on their websites. Its marketplace, which
connects both the buyers and sellers of ads, extends into the video
and web-connected television space.
In a press release, AT&T said it hopes the proposed
acquisition will strengthen its position in advanced television
advertising.
"Ad tech unites real-time analytics and technology with our
premium TV and video content," said Brian Lesser, CEO of AT&T's
advertising and analytics group. "So, we went out and found the
strongest player in the space."
Several Madison Avenue executives gave a thumbs-up to the deal
after reports it was in the works surfaced, predicting it could
offer them more choice in the digital ad market.
Google took a 31.7% share of the $232.27 billion spent globally
on digital advertising last year, according to eMarketer, while
Facebook took a 17.9% share.
After initial reports of AT&T's interest in AppNexus, there
were questions in the ad industry about whether the telecom firm
would look to maintain AppNexus's services for third-party
publishers, or only use its technology to monetize its own content
with ads.
A person familiar with the matter says this marketplace will
remain, which gives AT&T access to AppNexus's global advertiser
and publisher clients and will expand its presence beyond the
U.S.
On closing the Time Warner deal earlier this month, AT&T
restructured the combined company into four units, including an
advertising and analytics division. Mr. Lesser, who was on the
board of AppNexus, joined last October from WPP PLC's GroupM
media-buying unit to oversee those operations.
AT&T had been on sidelined from doing deals while its
acquisition of Time Warner was held up by a U.S. Justice Department
lawsuit. AT&T prevailed in court earlier this month.
News Corp, parent of The Wall Street Journal, is an investor in
AppNexus, alongside others, including WPP and investment firm TCV.
AppNexus was valued at $1.8 billion in a 2015 funding round.
Write to Lara O'Reilly at lara.o'reilly@wsj.com
(END) Dow Jones Newswires
June 25, 2018 08:49 ET (12:49 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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