AT&T to acquire digital ad firm AppNexus for $1.6 billion
Telecom giant wants to do more than capitalize on its own content
AT&T Inc. said Monday it has agreed to acquire advertising technology company AppNexus, a deal that could help the telecom giant capitalize on the media content it added through its purchase of Time Warner Inc. and give it more firepower to take on Google and Facebook for digital advertising dollars.
Terms of the deal 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.
In a press release, AT&T said it hopes the proposed acquisition will strengthen its position in advanced television advertising.
“Ad tech unites real-time analytics and technology with our premium TV and video content,” said Brian Lesser, CEO of AT&T’s advertising and analytics group. “So, we went out and found the strongest player in the space.”
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 choice 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.
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 thirdparty 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 ad- vertiser 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.
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.
“We went out and found the strongest player in the space.”
BRIAN LESSER, CEO OF AT&T’S ADVERTISING AND ANALYTICS GROUP