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AT & T creates a new market for digital video and television advertising



AT & T
Inc.


T 0.02%

advertising chief said that the acquisition of AppNexus by the company is part of a strategy to build the first market of its kind for television and video advertising digital and give it more firepower against juggernauts industry Google and

Facebook
Inc.

The terms of the AppNexus agreement, which was announced on Monday, were not disclosed. The Wall Street Journal reported last week that 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 on a wide range of websites and applications. The company also provides technology to publishers so they can manage and sell advertising space on their websites. Its market, which connects both buyers and ads sellers, extends to video and television space connected to the web.

The technology could help AT & T capitalize on the multimedia content it added through its recent purchase of Time Warner Inc., owner of CNN, TBS and TNT.

But

Brian Lesser,

The CEO of the AT & T advertising and analytics group said in an interview that the company's ambition is not only to help boost the advertising revenues of its own content but also to create a platform that connects advertisers with media audiences. rivals, through television and digital video.

"At this time, if you are a buyer in an agency or an advertiser, you have many excellent options in front of you in terms of television and video based on the audience, but they are not connected," said Mr. Lesser. .

AT & T also wants to provide data to allow advertisers to measure the "real performance" of their advertising campaigns, such as if someone who saw a car ad on their connected TV entered a car dealership, Lesser said. . [19659006] Several Madison Avenue executives approved the agreement after reports surfaced that it was under construction, predicting it could offer them more options in the digital advertising market.

Google obtained a share of 31.7% of the $ 232.27 billion spent worldwide in digital advertising last year, according to eMarketer, while Facebook had a 17.9% share. Together, Google and Facebook accounted for 58.5% of the digital advertising dollars spent in the US. UU Last year.

After the initial reports of AT & T's interest in AppNexus, there were questions in the advertising industry about whether the telecommunications company would seek to maintain AppNexus services for third-party publishers, or whether it would only use its technology to monetize its own Content with ads. [19659008] A person familiar with the matter says that this market will remain, which gives AT & T access to advertisers and global publishers of AppNexus and will expand its presence beyond the US. UU

In closing the Time Warner deal earlier this month, AT & T restructured the company into four units, including an advertising and analytics division. Mr. Lesser, who was on the board of AppNexus, joined last October

WPP

PLCM GroupM's media buying unit to monitor those operations.

AT & T had been left to make deals while the acquisition of Time Warner was stopped by a lawsuit by the US Department of Justice. UU AT & T prevailed in court earlier this month.

"We have a lot of ambitions in this area, so I would not be surprised if there were other acquisitions, but we have a lot of excellent people and excellent resources from the beginning, beats when we close this deal," Mr. Lesser said.

News Corp, father of The Wall Street Journal, is an investor in AppNexus, along with others, including WPP and investment firm TCV. AppNexus was valued at $ 1.8 billion in a 2015 financing round.

Companies said the transaction is expected to close in the third quarter of 2018.

Write to Lara O & # 39; Reilly at lara.o & reilly@wsj.com

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