US telecoms giant AT&T today confirmed it has entered into a definitive agreement to acquire ad tech company AppNexus for an undisclosed fee. AppNexus will be integrated into AT&T’s advertising and analytics unit, helping create what AT&T describes as “a foundation for a premium TV and video ad marketplace”.
The deal follows AT&T’s completed acquisition of media conglomerate Time Warner two weeks ago, and is framed by AT&T advertising & analytics CEO Brian Lesser as way for the company to capitalise on its now-expanded library of premium video and TV content.
“Ad tech unites real-time analytics and technology with our premium TV and video content,” said Lesser. “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.”
AT&T’s ad offering has historically been a small revenue source for the company, but the Time Warner takeover means it now has much more TV and digital ad space to sell. AT&T CEO Randall Stephenson said in the wake of the Time Warner deal that his company would look to make further acquisitions in order to bolster its advertising division, and this AppNexus deal suggests Stephenson is looking to expand in the digital ad space in particular.
AppNexus’ technology will be integrated with AT&T’s first-party data, video content and distribution, according to the company’s statement, with the ad tech company’s 400 strong workforce moving across to AT&T too. AT&T has not revealed whether AppNexus, which currently offers both buy-side and supply-side services, will continue to work with other publishers after the takeover, though a Wall Street Journal report claims publisher clients wont be cut off.
“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 of AppNexus. “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.”
Though the price of the takeover hasn’t been officially disclosed, figures circling last week after the first rumours emerged were varied. Sources quoted by the Wall Street Journal said the price was around $1.6 billion, while sources quoted by Cheddar said the figure would not be less than $2 billion.