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AT&T has lofty ambitions to change the way TV advertising is sold, but ad buyers worry it will become a walled garden like Facebook and Google

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  • AT&T rolled out Xandr this fall with a vision of
    turning its data and premium content into an ad platform that
    could enable advertisers to buy across the TV
    industry.
  • But media buyers say that it’s unclear how much
    AT&T is willing to work with competitors in 2019 to create
    standards in the ad industry.
  • They also worry that AT&T will take a walled garden
    approach that would make it hard to achieve its goal of getting
    TV companies to cooperate.

This summer, AT&T unveiled an ambitious plan to reinvent TV
and digital advertising. The idea: To create a tech platform
using the telecom’s data and premium content that could be

used by the entire TV industry
to sell advertising across
multiple networks using automated software.

“Ultimately, we are stronger if we can create one connected
marketplace for addressable television rather than asking
advertisers to buy it from multiple companies,” Brian Lesser, CEO
of AT&T’s ad division Xandr, told Business Insider in June.

In June, AT&T took a step in that direction,
acquiring AppNexus
to extend its reach into digital ad
inventory. The interest in Lesser’s plans landed Xandr on
Business Insider’s list of the
most interesting ad-tech and mar-tech companies of 2018.

But from the start,
TV execs questioned whether
rival networks would be willing
to work together and wondered how much AT&T would allow
competing companies into its ad business or if it would be become
a so-called “walled garden” à la Facebook and
Google. Others expressed the hope that AT&T would
fulfill its goal of an open marketplace, citing an urgency for
the TV business to evolve.

The TV industry still accounts for $70 billion in annual ad
spending, even with the rise of cord-cutting and shift of ad
dollars to digital. For decades,
TV commercials
have been sold through upfront, negotiated
deals. But advertisers want to buy TV ads more efficiently
through programmatic, targeted tools.

To speed up the shift to digital, rival networks like
NBCUniversal, Fox and Viacom
are pooling their data to create
audience segments. If AT&T were to create a walled garden
that favors its own content and ad-buying tools, execs worry that
a high-profile plan to revamp the TV industry will ultimately
fall flat without the backing of multiple companies.


Xandr CEO Brian Lesser.
Xandr CEO Brian
Lesser.

Xandr

“It’s very typical of telco thinking to build a walled garden,”
said Ana Milicevic, principal and cofounder of Sparrow Advisers.
“I would not be surprised if they started quickly moving away
from that type of [open] narrative and going to more of a ‘here’s
a one-stop where you can buy everything, and we’ll serve all of
your needs.”


Read more:

AT&T may be plotting to revolutionize TV advertising

Media buyers aren’t sure how AT&T’s ad business will shake
out

On the digital side, AppNexus has been integrated into AT&T’s
ad stack and recently started rolling out
revamped contracts
on the publisher side of its business that
detail how much advertisers pay for tech fees. As marketers
demand more transparency into how digital ads are sold, AppNexus
is among a handful of ad-tech companies trying to make the
digital marketplace open to multiple vendors.

On the TV side, AT&T could be considering building ad tools
that only live within its platform, said Jay Friedman, president
of Goodway Group.

“To me, they’ve kind of gone underground — are they going to be a
walled garden or not?” he said. “If we’re going to be required to
log in, then I guess that puts them in the Facebook, Google,
Amazon camp.”

Other media buyers said that it’s too early to gauge how AT&T
will use data across multiple properties but say the vision of an
open marketplace remains appealing. TV advertising remains a
massive business for advertisers and the ability to combine those
linear spots with lucrative telecom data to fine-tune audience
targeting and better understand how effective TV ads are is still
a massive, untapped opportunity.

“The early days of Xandr haven’t been as clear in relation to how
their data will be used across non-owned entities,” said Jason
Smith, who leads digital investment for Mindshare Chicago. “We’re
pretty optimistic about this idea of adding new inventory sources
that scale up across premium video ad inventory with some level
of data attached that are based off of a linear heritage.”

 

 

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