Another legacy carrier built on offering phone services is now taking a deeper dive into the world of advertising and specifically ad tech to help catapult itself into the next generation of tech and communications. Today, AT&T confirmed that it is buying AppNexus, a programmatic advertising marketplace. The news caps off a week of speculation after it was reported last week that it was eyeing up the company for about $1.6 billion. Today’s release did not reveal any financial terms, except to note that the deal is expected to close in the third quarter of 2018. (We are reaching out to see if we can get more detail.)

AppNexus reportedly confidentially filed for an IPO in November 2016, valuing the company at between $1.5 billion and $2 billion although that deal appeared never to materialise. AppNexus had raised about $344 million from a range of investors including News Corp., WPP, Fidelity, TCV, Microsoft, Deutsche Telekom, Khosla, and many more.

AT&T plans to put AppNexus under its existing advertising and analytics division. As with Verizon and other carriers, AT&T has been working on ways of expanding its advertising business on top of its existing mobile network and broadband access operations. The latter have become increasingly commoditised over the years, and with a plethora of media and tech companies dominating in content, advertising — and ad tech — represent opportunities for carriers like AT&T to grow their revenues around the data that they already have about their customers — which in AT&T’s case exceeds 170 million “direct-to-consumer relationships across its wireless, video and broadband businesses.” And while AT&T is focused mainly on the US market, AppNexus will give it further reach into Asia-Pacific, Australia, Europe, and Latin America.

(This was also the rationale behind Verizon’s acquisition of AOL, which owns TechCrunch and is now branded as Oath.)

“Ad tech unites real-time analytics and technology with our premium TV and video content,” said Brian Lesser, CEO of the division at AT&T. “So, we went out and found the strongest player in the space. AppNexus has scale of infrastructure, advanced technology and diverse talent. The combination of AT&T advertising & analytics and AppNexus will help deliver a world-class advertising platform that provides brands and publishers a new and innovative way to reach consumers in the marketplace today.”

Although AT&T could have built this from the ground up, this bolts on some 400 engineers and IP and an existing business to the company.

AT&T says it “will continue to invest in and build on AppNexus’ foundational technology as it integrates with AT&T’s first-party data, premium video content and distribution.”

“Innovation is core to the heritage of both AT&T and AppNexus, and we have an exciting opportunity to chart the future course of advertising together,” said Brian O’Kelley, CEO, AppNexus, in a statement. “Combining AT&T’s incredible assets with our technology, we will help brands and marketers power new advertising experiences for consumers. It’s what the market is asking for, and together we’re poised to deliver it.”

AT&T’s ad-supported premium video content portfolio currently includes Turner NetworksAudience Network, and Otter Media.

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