AT&T Deal for Time Warner Could Open More Options to Advertisers
October 21 2016 - 7:11PM
Dow Jones News
By Mike Shields
When Verizon Communications acquired AOL and agreed to buy Yahoo
, the telecom giant clearly telegraphed its desire to build a
digital advertising powerhouse to counter the growth of Google and
Facebook.
Now, with AT&T Inc. in advanced talked to acquire Time
Warner Inc., the advertising synergies generated by such a marriage
are less obvious, but potentially powerful, according to ad
buyers.
"This feels like it's about distribution and having as many
consumer touchpoints as you can, and advertising is secondary,"
said one top media buyer.
Most ad executives liken the deal's potential to that of Comcast
Corp.'s acquisition of NBCUniversal rather than Verizon's recent
deals. That is, they see the move by AT&T as an attempt at
building a media conglomerate that plays in nearly every key sector
of the industry and theoretically sets up the new entity to adapt
to a rapidly changing consumer landscape.
"This is marrying content creation with another powerful
distribution and data partner in AT&T," said Brian Leder,
senior vice president and head of media investments &
partnerships for the ad agency DigitasLBi. It sets up AT&T to
be in a position to "understand future trends in consumer behavior
and changes in content consumption."
The deal "lets them hedge their bets," added Michael Bologna,
president of Modi Media, a division of the media buying giant
GroupM. "It just gives them so many different plays. It's not all
about advertising but advertising could be a big part of it."
Mr. Bologna said that an AT&T-Time Warner machine would be
able to test a number of different ad strategies. The combined
entity could, for example, take set-top data from DirecTV and
AT&T's U-Verse products and use it for ad targeting on Turner's
networks, which include CNN, TBS and TNT. Or it could take
AT&T's vast supply of wireless subscriber data and use that for
ad targeting on Time Warner's digital properties, like CNN.com or
Bleacher Report, he said.
Either way, AT&T should jump a few notches in many
advertisers' consideration sets when deciding where to dole out ad
budgets.
"At the end of day, AT&T on its own was mostly local TV ad
inventory on a satellite service with some of their own mobile
stuff," Mr. Bologna said. "They were not even in the same league as
national TV. To me, this feels like Comcast all over again."
Plus, as the ability to target the same person with ads on
multiple devices becomes increasingly crucial -- and the domain of
only a few major players like Facebook and Google -- AT&T would
theoretically have a much better position in that race with this
deal, one buyer noted.
Write to Mike Shields at mike.shields@wsj.com
(END) Dow Jones Newswires
October 21, 2016 18:56 ET (22:56 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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