6. What AT&T's new ad platform, TV biz will look like
Now that AT&T has successfully completed the transaction of Time Warner, it's moving quickly to get its ad business up and running.
Why it matters: AT&T hopes it will bring them a new revenue stream that can help subsidize Pay-TV losses as more people cut the cord. Marketers hope it will give them a new way to more seamlessly target consumers across many screens and devices.
Here's what it will look like. The new AT&T will be separated into four businesses: 1) Media; 2) Advertising and Analytics; 3) Communications (broadband/wireless); and 4) International. Their media business has been renamed "WarnerMedia."
- The ad business will be led by Brian Lesser, formally of GroupM, who will serve as its CEO reporting directly to AT&T CEO Randall Stephenson.
- Lesser has been working on creating a premium TV ad platform since joining the company last summer.
- Lesser is charged with leveraging Time Warner's premium content and ad technology with AT&T's set-top box and wireless data.
- Stephenson teased the launch of the advertising platform in an interview with CNBC last week and teased smaller acquisitions in the ad tech space in the "coming weeks."
One challenge AT&T may face in competing with the likes of Google and Facebook is scale. Addressable (targeted) advertising only works when you have a large numbers of people to create niche targeting categories.
- AT&T says it reaches 170 million unique direct-to-consumer connections across AT&T-specific wireless, video and broadband. The company has 15 million addressable television households, or houses that can be targeted with with digital ads.
- While this is considered one of the largest addressable platforms for a telecom company, it's still much smaller in scale than Facebook, with over 2 billion users reachable on mobile.
What's next? To solve the scale problem, sources say AT&T's ad network could eventually bring on other media and technology partners to combine their inventory. With the acquisition of Turner, they are inheriting a property that is already a part of a joined TV-targeting effort called Open AP.
Want more? I discuss more about the merger on Adlandia's bi-weekly marketing podcast hosted by Laura Correnti and Alexa Christon. Subscribe.
Go deeper: How AT&T's merger will change how we watch TV, by Axios' Kim Hart