A Blog by Jonathan Low

 

Jun 27, 2018

ATT Plans Digital Ad Marketplace To Rival Google and Facebook

The looming question is whether this will create new competition for pieces of the existing pie or actually creates an innovation that will expand it. JL

Lara O'Reilly reports in the Wall Street Journal:

The company’s acquisition of AppNexus is part of a strategy to build a marketplace for television and digital video advertising and give it more firepower against Google and Facebook. The company’s ambition is not just to boost ad revenue from its own content but to create a platform that connects advertisers with audiences from rival media outlets, across television and digital video. AT&T also wants 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
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.

0 comments:

Post a Comment