AT&T buys ad exchange AppNexus

Apparently, the recent Time-Warner acquisition left AT&T hungry for more. On Monday, the telecommunications giant announced it was buying programmatic ad marketplace AppNexus.

“Ad tech unites real-time analytics and technology with our premium TV and video content,” AT&T Advertising and Analytics CEO Brian Lesser said in a statement. “So, we went out and found the strongest player in the space.”

The deal will add programmatic capabilities for matching ads with inventory and a broader global footprint to AT&T’s 170 million customer relationships. Deal terms were not made public, although there have been reports the price tag was about $1.6 billion. A little more than a week ago, AT&T closed it $86 billion acquisition of Time Warner, which brought aboard the libraries of Warner Bros., HBO and Turner.

AppNexus has described itself as the world’s largest ad marketplace, with about 34,000 publishers, more than 170,000 brands and a variety of tools for measuring and boosting ad performance.

Like Verizon, which acquired advanced ad tech when it bought AOL and Yahoo, AT&T is addressing the fact that its mobile services are becoming commodities and that there is a broad movement among younger consumers away from cable and toward over-the-top entertainment.

“AT&T is interesting,” Forrester VP Joanna O’Connell told me, since it now has content to go with its pipes. And AppNexus offers entry right “in the middle” of digital ad buyers and sellers, she said.

AppNexus customers probably won’t see an immediate change, she noted, although it’s likely that AppNexus’s range of inventory will dramatically expand.

While Verizon is the obvious comparison, Lesser — who comes from the WPP-owned GroupM media investment operation — has made clear that he also has his eyes on Google and Facebook.

“Google and Facebook prove that platforms rule,” he recently told Adweek. “When you make it easy for advertisers to efficiently buy at scale and generate performance, that’s what they will choose.”

Not incidentally, mobile carriers like AT&T may be in a better position that other players in these days of consumer consent, since wireless contracts may contain consent clauses as part the agreement. This gets AT&T and Verizon closer to Google’s and Facebook’s walled gardens.

WPP, by the way, bought $25 million of AppNexus several years ago, and a number of observers had been predicting this purchase as soon as Lesser joined AT&T last summer.

About The Author

Barry Levine

Barry Levine covers marketing technology for Third Door Media. Previously, he covered this space as a Senior Writer for VentureBeat, and he has written about these and other tech subjects for such publications as CMSWire and NewsFactor. He founded and led the web site/unit at PBS station Thirteen/WNET; worked as an online Senior Producer/writer for Viacom; created a successful interactive game, PLAY IT BY EAR: The First CD Game; founded and led an independent film showcase, CENTER SCREEN, based at Harvard and M.I.T.; and served over five years as a consultant to the M.I.T. Media Lab. You can find him at LinkedIn, and on Twitter at xBarryLevine.