Insights & Analyses

AT&T acquires ad tech platform AppNexus, which advocates for a standardized identification system for digital ads – One World Identity

June 25, 2018

AT&T on Monday confirmed it will acquire AppNexus, which operates the world’s largest independent digital advertising marketplace, for an undisclosed sum — a move that could give traction to the Advertising ID Consortium’s open identity solution.

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As a member of the Advertising ID Consortium, AppNexus has pushed an open identity framework that would enable people-based marketing, allowing advertisers to compete more directly with the likes of Facebook and Google, who specialize in targeted advertising with data contributed by users. The ad tech consortium instead pools tracking cookie IDs into one shared identity asset, which it aims to be a transparent and neutral unique identifier.

Citing a person close to the deal, Cheddar reported that AppNexus would not sell for less than $2 billion. A 2015 funding round valued the company at $1.8 billion.

It’s unknown whether AT&T will participate in the consortium once its acquisition of AppNexus is finalized. But if the telecom giant does so, it could bring considerable clout and financial backing to the platform.

AT&T said its acquisition of AppNexus will allow it to accelerate the growth of its advertising platform, particularly with advanced TV advertising. Through the deal, AT&T will also take on more than 400 software engineers and product managers with experience in machine learning, predictive analytics, advertising technology, and video.

Citing a person familiar with the acquisition, The Wall Street Journal said that AT&T does plan to keep open AppNexus’s marketplace for third-party publishers

If AT&T and AppNexus continue to participate in the Advertising ID Consortium, they will work to streamline the digital advertising space, making it easier to deliver targeted ads by tracking users across devices. If enough parties buy in to the consumer identification system pushed by the consortium, it could help give more traditional advertisers the ability to go toe to toe with Facebook and Google.

OWI Insight: AT&T’s announcement makes it clear that it is interested in AppNexus technology primarily for video ads on TV and online. The deal comes on the heels of AT&T’s acquisition of Time Warner, making the company a content and advertising powerhouse. The involvement of AT&T could be a major shot in the arm for the Advertising ID Consortium, and could completely change the landscape of online advertising, becoming a major boon for publishers who have struggled against the walled garden approaches of Facebook.