Facebook and Google made up a combined 58.5% of all U.S. digital ad dollars spent in 2017, according to eMarketer. Despite brand safety issues, data leakage concerns, and other recent complications, this digital duopoly is projected to continue to see applicable revenue increases for the next several years.
However, AT&T might just be the dark horse on the horizon.
The AppNexus Acquisition
With AT&T’s recent acquisition of AppNexus, it appears the tech giant is moving into a strategic position to gain market share — and possibly disrupt the digital ad space.
One of the most obvious reasons for the AppNexus acquisition is its ability to help AT&T immediately impact ad yields — especially those related to the Time Warner merger (now WarnerMedia) — by acting as the pipes that connect their newly acquired premium content and data to the outside world.
But the AppNexus acquisition isn’t just about monetizing AT&T’s own content; it’s also about attempting to build a best-in-class TV and digital video platform that connects an enormous amount of anonymized first-party data to one of the most directly deterministic and comprehensive device graphs available.
The platform is expected to combine real-time measurement and audience analytics with new and innovative advertising initiatives across all advertising formats — not just TV and video. If successful, that means that an advertiser could use AT&T’s first-party data, possibly anonymized and aggregated viewership and/or browsing data, to target users at an ID-level across devices. That’s some pretty powerful stuff.
If AT&T is really going to be one of the first large-scale platforms to effectively combine mobile and TV with other devices, it’s going to need to add several pieces to its tech stack. After the Time Warner acquisition, AT&T’s leadership team said it was ready and willing to do just that. AppNexus was just the first step.
For example, AT&T will likely need to significantly improve its knowledge surrounding machine learning and real-time analytics and continue to advance its ID-stitching and device graph capabilities. (Don’t be surprised if AT&T ends up putting its name in the LiveRamp acquisition ring.)
As AT&T decides which pieces to build and which pieces to buy, the 400 skilled software engineers and product managers that AppNexus brings to the table will be invaluable.
AT&T’s success with AppNexus is a wait-and-see situation, but it paves the way for more data-driven marketing advances that could significantly change the game.
