AT&T officially buying AppNexus to strengthen advanced TV ad platform

AT&T didn’t disclose the financial terms of the deal but reports said AT&T is paying $1.6 billion for AppNexus. (Mike Mozart/Flickr)

AT&T officially confirmed reported plans to buy ad tech company AppNexus in a bid to strengthen AT&T’s advanced television advertising business.

The provider didn’t disclose the financial terms of the deal—reports said AT&T is paying $1.6 billion for AppNexus—but the company did say that it expects the deal to close in the third quarter of 2018.

AT&T will be bringing on AppNexus’s management team and employee base that includes more than 400 software engineers and product managers. The team will become part of AT&T advertising & analytics, led by division CEO Brian Lesser.

“Ad tech unites real-time analytics and technology with our premium TV and video content,” said Lesser in a statement. “So, we went out and found the strongest player in the space. AppNexus has scale of infrastructure, advanced technology and diverse talent. The combination of AT&T advertising & analytics and AppNexus will help deliver a world-class advertising platform that provides brands and publishers a new and innovative way to reach consumers in the marketplace today.”

RELATED: AT&T already back in M&A mode, eyeing AppNexus for $1.6B and all of Otter Media

In AppNexus, AT&T is getting a firm that specializes in machine learning and predictive analytics, advertising technology and video. AT&T will integrate AppNexus’s technology with its own AT&T’s first-party data stemming from its millions of direct to consumer relationships with mobile, pay TV and broadband. AT&T will also incorporate its video content including the Turner networks it just took hold of as part of its $85 billion acquisition of Time Warner. Through AppNexus, AT&T will extend its ad business’s global reach into Asia-Pacific, Australia, Europe and Latin America.

“Innovation is core to the heritage of both AT&T and AppNexus, and we have an exciting opportunity to chart the future course of advertising together,” said Brian O’Kelley, CEO of AppNexus, in a statement. “Combining AT&T’s incredible assets with our technology, we will help brands and marketers power new advertising experiences for consumers. It’s what the market is asking for, and together we’re poised to deliver it.”

AT&T CEO Randall Stephenson said now that the Time Warner deal is done, AT&T is on track to launch a real-time ad exchange platform within 24 months.

Stephenson said that AT&T’s targeted ad exchange platform will differentiate from digital platforms like Facebook and Google by offering marketers the chance to place their brands next to premium content.