AT&T’s Curiosity in Advert Tech Will get Thumbs Up on Madison Avenue

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CANNES, France—Information of

AT&T
Inc.’s

T zero.28%

talks to amass promoting know-how agency AppNexus was welcomed by entrepreneurs, who’re desperate to have extra choices within the on-line advert sector past Google Inc. and

Fb
Inc.,

FB zero.12%

the dominant gamers.

AT&T, which is recent off its acquisition of Time Warner Inc., has a treasure trove of TV and digital content material from manufacturers comparable to CNN and TNT. Now the telecom large is in talks to purchase AppNexus for $1.6 billion, a deal that may assist it monetize that content material higher, utilizing knowledge from wi-fi prospects to serve extremely focused adverts.

“It’s a lightning bolt throughout the business,” mentioned

Bob Rupczynski,

McDonald’s world vp of media and buyer relationship administration, on the sidelines of the advert business’s annual Cannes Lions pageant on the French Riviera. Mr. Rupczynski mentioned the deal would give AT&T instant infrastructure and extra knowledge and will give entrepreneurs “extra leverage” in coping with Google and Fb.

“The extra choices we have now out there, the higher it’s going to be for the market,” mentioned

Antonio Lucio,

chief advertising officer at Hewlett-Packard Co.

Some business executives speculated that AT&T may additionally search for additional promoting know-how acquisitions within the coming months to strengthen its providing to entrepreneurs.

AppNexus’s know-how helps advertisers purchase adverts utilizing automated methods, throughout swaths of internet sites and apps. The agency additionally provides know-how to publishers to allow them to handle and promote the promoting area on their web sites. Its market, which connects the consumers and sellers of adverts, additionally extends into video and the web-connected TV area.

AppNexus’s capabilities may very well be helpful as AT&T launches new streaming providers of its personal that intention to generate some income from adverts. On Thursday, the corporate unveiled a $15-a-month video service providing a “skinny bundle” of TV channels. Limitless knowledge plan subscribers will get free entry to the service, which is named WatchTV.

The AppNexus deal “could be a key step in direction of serving to AT&T construct out a way more important digital promoting enterprise than it presently has,” mentioned

Brian Wieser,

a senior analyst at Pivotal Analysis, in a notice.

Entrepreneurs are all “very eager for diversification,” mentioned

Quentin George,

founding father of the ad-tech consultancy Unbound. “They’re involved about their reliance on Fb and Google.”

Google took a 31.7% share of the $232.27 billion spent globally on digital promoting final yr, in accordance with eMarketer, whereas Fb took a 17.9% share. Their market share within the U.S. is even larger.

AppNexus ought to assist AT&T develop a extra superior enterprise in focused TV adverts, mentioned business executives.

“It could present among the capabilities the corporate would anticipate it wants so as to apply knowledge and automation to conventional TV promoting,” mentioned Mr. Wieser in his notice. Nevertheless, he added, “we expect this latter alternative is comparatively restricted within the near-term.”

On closing the Time Warner deal, AT&T restructured the mixed firm into 4 models, together with an promoting and analytics enterprise.

Brian Lesser,

who was on the board of AppNexus, joined final October from WPP’s GroupM media-buying division to supervise these operations.

If AT&T does purchase AppNexus, it’s unclear whether or not it will proceed the advert tech agency’s providing for third-party writer web sites or give attention to monetizing its personal content material with adverts.

“One has to ask how different media corporations really feel about working with a really massive competitor now that AT&T is a media firm by way of their Time Warner acquisition,” mentioned

Anthony Katsur,

senior vp of digital technique at Nexstar Media Group. “That might create a pure pressure.”

AT&T declined to remark.

Round one-third of AppNexus’s enterprise is in Europe, in accordance with folks aware of the matter. Which means AT&T may even should be aware of compliance with the area’s sweeping new Normal Information Safety Regulation, also called GDPR.

One in all AT&T’s strongest belongings is its buyer knowledge, mentioned

Michael Nevins,

chief advertising officer at Paris-based ad-tech firm Good. “GDPR would definitely be one of many filters they must be pondering via when they consider how they activate that knowledge [in Europe],” Mr. Nevins mentioned.

Write to Lara O’Reilly at lara.o’reilly@wsj.com and Alexandra Bruell at alexandra.bruell@wsj.com



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