AT&T Plots Marketplace for TV, Digital Video Ads -- 2nd Update
June 25 2018 - 2:20PM
Dow Jones News
By Lara O'Reilly
AT&T Inc.'s advertising chief said the company's acquisition
of AppNexus is part of a strategy to build a first-of-its-kind
marketplace for television and digital video advertising and give
it more firepower against industry juggernauts Google and Facebook
Inc.
Terms of the AppNexus deal, which was announced Monday, 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.
The technology could help AT&T capitalize on the media
content it added through its recent purchase of Time Warner Inc.,
owner of CNN, TBS and TNT.
But Brian Lesser, the CEO of AT&T's advertising and
analytics group, said in an interview that the company's ambition
is not just to help boost ad revenue from its own content but to
create a platform that also connects advertisers with audiences
from rival media outlets, across television and digital video.
"Right now if you are a buyer at an agency or an advertiser you
have lots of great options in front of you in terms of
audience-based television and video, but they're not connected,"
Mr. Lesser said.
AT&T also wants to offer data to allow advertisers to
measure the "real performance" of their ad campaigns, such as
whether someone who saw an automobile ad on their connected TV
walked into a car dealership, Mr. Lesser said.
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 choices 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. Combined, Google and Facebook
accounted for 58.5% of the digital ad dollars spent in the U.S.
last year.
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 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.
"We have a lot of ambitions in this area so I wouldn't be
surprised if there were other acquisitions, but we've got a lot of
great people and great resources right off the bat once we close
this deal," said Mr. Lesser.
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.
The companies said the transaction is expected to close in the
third quarter of 2018.
Write to Lara O'Reilly at lara.o'reilly@wsj.com
(END) Dow Jones Newswires
June 25, 2018 14:05 ET (18:05 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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