T AT&T Inc

By Sahil Patel 

Brian Lesser, the chief executive of AT&T Inc.'s advertising technology unit Xandr, is leaving in a move that caught some within the company off-guard, according to people familiar with the matter.

Mr. Lesser, a longtime advertising executive who joined AT&T in 2017 to launch and run its advertising unit, resigned from his post, the people said.

News of Mr. Lesser's departure was earlier reported Wednesday by Reuters.

An AT&T spokesman declined to comment. Mr. Lesser didn't respond to inquiries about his departure.

Mr. Lesser's departure follows the exit of Xandr President Rick Welday last September, as the ad unit began to operate more closely with its corporate sibling WarnerMedia, which houses properties such as the television networks CNN and TNT.

WarnerMedia CEO John Stankey had been promoted earlier that month to the additional, new posts of president and chief operating officer at AT&T, and Mr. Lesser began reporting to Mr. Stankey instead of AT&T CEO Randall Stephenson.

AT&T is seeking a new CEO for WarnerMedia, a role for which Mr. Lesser had been vying, a person familiar with the matter said.

Current and former executives at WarnerMedia and Xandr have long expected the units to eventually combine.

Xandr generated $2 billion in revenue in 2019, up 16.2% over the previous year. The growth included revenue added as a result of the company's acquisition of ad-tech giant AppNexus in 2018.

Xandr's contribution to overall company profit slipped in 2019. The segment's operating profit declined 1.1% to $1.32 billion in 2019, according to an AT&T filing.

Xandr also had trouble boosting advertiser demand for its ad marketplace technology, which served AT&T's own pay-TV businesses and WarnerMedia as well as outside companies, the people familiar with the matter said.

Xandr's technology is built on assets acquired when AT&T purchased ad-tech giant AppNexus in 2018 for about $1.6 billion.

The AppNexus deal was intended to help AT&T upend the $70 billion traditional TV ad market by building a powerful ad business backed by its own audience data and ad tools.

Internally, Xandr has faced criticism from WarnerMedia ad sales executives who called AppNexus's technology underwhelming, citing the company's background in display ads, not video.

Xandr also has had trouble convincing TV networks to supply their inventory for its platforms, partly due to competitive concerns. Other TV networks are interested in setting up their own data-driven advanced TV products, and already compete for advertisers with WarnerMedia networks.

Earlier Wednesday, Xandr announced deals to make national commercial time available on TV networks owned by Walt Disney Co. and AMC Networks Inc.

Drew FitzGerald contributed to this article.

Write to Sahil Patel at sahil.patel@wsj.com

(END) Dow Jones Newswires

March 11, 2020 18:07 ET (22:07 GMT)

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