Babar Khan Javed
Jun 27, 2018

AppNexus/AT&T: Duopoly-buster, another walled garden, or both?

APAC industry insiders differ on the meaning of the acquisition for the digital advertising ecosystem.

Brian O'Kelley, CEO and co-founder of AppNexus (Source: AFP)
Brian O'Kelley, CEO and co-founder of AppNexus (Source: AFP)

The acquisition of AppNexus by AT&T will either reduce dependence on the Facebook/Google duopoly and/or create in effect a "triopoly", according to various APAC industry insiders contacted by Campaign.

Precision targeting

By and large, industry leaders believe the acquisition will be a net positive for the digital advertising ecosystem, primarily by forcing the duopoly to step up its game.

By leveraging primary assets such as customer data, premium content and its vast media properties, AT&T can effectively compete in ad sales as marketing professionals demand more data-driven media offerings. The main lesson media and telecom companies in APAC should take from this reportedly $2 billion strategic acquisition? Just how critical it is to bring their data assets to the forefront in order to win in digital advertising as marketer preferences and consumer behaviour shift.

According to Alex Sibois, MD of APAC at Lotame, AppNexus will give AT&T full control and autonomy to manage its digital operations and increase efficiencies by limiting cookie loss via a unique technology stack. This will optimise revenue by cutting out the middleman and reduce dependence on the duopoly while imposing new standards. As an advertiser and publisher at the same time, he says, AT&T has the critical volume of media buying and content to control its own technology stack.

"Brands can work out deal ID's more efficiently and pay a premium if AT&T is willing to provide attribution info," he said, adding that both AT&T and AppNexus will benefit from the deal as it creates safe, bot-free traffic and viewability standards directly negotiated between all stakeholders.

Hello, triopoly?

Globally speaking, the acquisition may create more competition for Facebook and Google, according to James Sampson, APAC VP and GM at Dataxu. The bigger lesson is that mega audience owners have to exploit advantages over competitors, he added. Sampson said this can be done by moving to omnichannel audience-led advertising products that are unique and controlled.

"While AppNexus provides AT&T [with] some missing plumbing required to build its advertising business upon, AT&T still needs to tie together all of their siloed consumer data for planning, media-execution and analytics purposes," said Sampson. 

Habibullah Khan, head of content at Penumbra, a Pakistan digital media agency, said that the acquisition is driven by Google and Facebook's dominance of digital advertising, which is making large advertisers uncomfortable.

Khan sees digital advertising as a great natural extension for AT&T, with the acquisition giving large advertisers another alternative to the duopoly to target 140 million subscribers in the US, the world's top advertising market.

"Telecoms know their customers intimately," Khan said. "Telecoms know your personal detail, your location and in an age of ad blockers, they know who you are at all times and where you are online, because of your mobile phone."

Sampson suspects that the acquisition could also lead to a closed, walled garden ad-network model, an issue that reduces transparency and control for advertisers and agencies.

Even so, he sees positive outcomes. "Either way, marketing professionals are going to start having more and more high-quality media and highly validated audience data options around the globe to work within their respective markets, lessening the dependency on the duopoly," he said.

Damien Thomson, APAC GM at Sizmek, minced no words, stating outright that the acquisition creates another walled garden in the ecosystem. AppNexus is no longer independent and objective, he added, which he says are characteristics that agencies and advertisers are looking to work with across their entire media plan and the open web.

"As this market consolidation continues, the need for independent adtech players who work in the best interest of advertisers and agencies is greater than ever," said Thomson. "In this post-GDPR world, data ownership and control are vital."

Additional perspectives from industry leaders:

Steven Ghoos
Managing Director, Indonesia
Lion & Lion

The immediate impact for the region will be limited even though AppNexus is operational in APAC. There is still a lot less data available for proper targeting on advertising platforms compared to more developed Western markets, so this is certainly a major opportunity for companies to reach their target audience. However, AT&T will have competition from other large local telco providers that have access to customer data who are already known to use this for advertising objectives. For example IMX, the adtech network launched by Indosat in Indonesia.

Dominic Powers

The acquisition of AppNexus by AT&T, hot on the heels of their deal for Time Warner, shows that programmatic is becoming mainstream, and critical for telco and media companies that are reinventing themselves. This is not the last acquisition of this kind that we will see. And more interestingly, it actually makes AppNexus more relevant in a market where its almost 30% ownership by WPP prevented other agency networks from using it. With this acquisition, AppNexus could achieve growth that had possibly been lacking over the last few years. 

Agnesia Ekayuanita
Programmatic trading manager, Asia
BBC Global News Limited

Many of the big players have been on a shopping spree recently, acquiring adtech companies to take part in digital media competition. This shows that they see digital media and adtech as a great opportunity/potential for their business. This specific acquisition by a telecommunications company will bring a fresh perspective and potentially even propel AppNexus to break the duopoly.

Martin Kelly
Infectious Media Ltd

The ATT acquisition of Appnexus is the next of a continuing trend in content and data owners marrying their assets with adtech platforms. It’s a strategy not dissimilar to that of Singtel with their roll-up of Amobee and Turn over the last two years. However, the potential difference is the content ownership angle. It will be interesting to see in the mid-term if this becomes more of a walled garden play with the Time Warner content sitting at the heart of the offering.

Seb Lepez
Jolt Digital

AT&T is pivoting into media and advertising, with properties around media distribution, content creation and now adtech. AT&T is operating a big shift in their model as they understood that their core business of mobile network provider is not delivering growth as much as tech and media could.

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