AT&T reportedly considers selling Xandr digital ad business

Linda J. Dodson

Table of Contents

Dive Brief:

  • AT&T is looking to sell its Xandr digital advertising business as the telecommunications giant scales back its effort to build a data-driven sales platform for television. The plans are in an early stage and may not lead to a sale, The Wall Street Journal reported, citing people familiar with the matter.
  • AT&T launched Xandr in 2018 to rival digital advertising giants like Google and eventually expand into programmatic ad sales for connected TV (CTV) as households shifted their viewing habits to streaming services. The launch followed the $1.6 billion acquisition of digital ad marketplace AppNexus, whose operations were a core part of Xandr.
  • The reported discussions about selling Xandr come as the telecom company looks to cut debt after years of blockbuster acquisitions that included its $85 billion takeover of Time Warner. AT&T also is in discussions with private-equity firms about selling its DirecTV satellite TV business, per a separate report by The Wall Street Journal.

Dive Insight:

AT&T’s reported plans to sell Xandr mark a reversal of its effort to help marketers reach target audiences on media channels like CNN, TNT and Cartoon Network using consumer data from sources such as AT&T Wireless. Much of Xandr was built on AppNexus’ online ad exchange, whose demand-side platform (DSP) for marketers last year was rebranded as Xandr Invest, while its sell-side platform (SSP) for content providers was later renamed as Xandr Monetize. Xandr also started an over-the-top (OTT) marketplace called Community to help advertisers reach the growing audience for streaming media in a brand-safe environment.

It’s too early to tell whether a sale of Xandr will major affect marketers’ ability to buy digital advertising on thousands of websites and the growing number of advertising video on demand (AVOD) services that reach CTV households. One of Xandr’s key selling points has been its access to AT&T’s data on 170 million direct-to-consumer (DTC) relationships with customers, helping marketers with their audience-based targeting. If Xandr is sold, it could license the AT&T data for ad targeting and provide uninterrupted service to marketers, but it would lose a key competitive advantage. Xandr also could continue to sell ad inventory on WarnerMedia’s various media properties, but may lose some exclusivity.

For AT&T, the possible sale of Xandr indicates that its sweeping plans to build a digital advertising business didn’t meet expectations. Xandr didn’t generate the high revenue growth that AT&T had expected to achieve, and struggled with technical glitches, The Wall Street Journal reported. It also faced roadblocks in gaining access to video inventory from rival media companies that viewed AT&T’s WarnerMedia division as a competitor.

However, Xandr in March announced it would begin selling linear TV ad placements on AMC Networks, Disney and WarnerMedia networks. Xandr’s revenue fell 25% to $362 million in Q2 from a year earlier as the coronavirus pandemic dampened demand for advertising, per AT&T’s quarterly earnings statement.

Source Article

Next Post

IAB: US digital ad spend will grow 6% this year amid broader slowdown

Dive Brief: Advertising executives expect spending on digital advertising in the U.S. will grow 6% this year, contrasting with an 8% decline for the broader ad market. Spending on traditional media that includes linear TV, out-of-home, standard radio, print and direct mail will plunge 30%, the Interactive Advertising Bureau (IAB) […]

You May Like