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"Game of Thrones" is part of AT&T's WarnerMedia.
- 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
"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
Xandr CEO Brian Lesser.
"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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