Connect with us

International Circuit

AT&T in Talks to Acquire AppNexus for About $1.6 Billion

AT&T Inc. is in talks to acquire advertising technology company AppNexus, according to people familiar with the matter, a deal that would give the telecom giant a foothold in digital ad sales as it seeks to become a challenger to Alphabet Inc.’s Google and Facebook Inc.

AT&T is expected to pay around $1.6 billion, the people said. AppNexus, which is backed by investors including ad giant WPP PLC, investment firm TCV and Wall Street Journal parent News Corp , was valued at $1.8 billion in a 2015 funding round.

The company filed confidentially for an initial public offering in 2016 but has held off amid an unforgiving climate for public offerings.

Acquiring AppNexus would advance AT&T’s ambitions to build a robust advertising business. AppNexus operates one of the largest online ad exchanges, automated marketplaces that allow advertisers to buy space across thousands of websites, targeting their desired audiences.

Cheddar earlier reported the AT&T talks with AppNexus.

Already, AT&T’s DirecTV unit sells TV ads. The company’s recent acquisition of Time Warner Inc.—renamed WarnerMedia — will give it access to much more TV ad space from channels like TNT, TBS and CNN.

AT&T believes it can appeal to advertisers by allowing granular targeting of TV ads to households with certain characteristics using its huge amount of data on wireless customers to target ads and measure whether they are effective. The company last summer brought in a top executive from WPP, Brian Lesser, to run its advertising and analytics business.

With an acquisition of
AppNexus, AT&T would move deeper into the digital ad realm. But it would remain a relatively small player compared to the giants, Google and Facebook, which together are expected to have 56.8% of the U.S. digital ad market this year, according to eMarketer.

While some ad tech firms work only for publishers, helping them manage ad space on their sites, or ad buyers, helping agencies purchase ads, AppNexus is in both lines of business.

The company’s chief executive, Brian O’Kelley, is an ad tech veteran. He is credited with building one of the first ad exchanges, Right Media, which he eventually sold to  Yahoo in 2007.

AT&T’s main rival, Verizon Communications Inc., already is a player in online advertising after its 2015 purchase of AOL for $4.4 billion. Verizon purchased the digital assets of Yahoo in 2016 for $4.83 billion and merged them with AOL to create a new company called Oath.

“By all rights, the carriers really should be the next big mobile media players,” said Jon Jackson, founder and chief executive of Mobile Posse, a mobile advertising technology company. “They have over a hundred million subscribers unlocking their AT&T phones 120 times a day, they’re in a great position. But first they need to sort out how they get content in front of their subscribers and next sort out how to plug in mobile advertising.” – The Wall Street Journal

Click to comment

You must be logged in to post a comment Login

Leave a Reply

 

Copyright © 2022 Communications Today

error: Content is protected !!