Digital Trend & Solutions

Telcos flirt with the advertising market

AT&T appears to be nearly closing the acquisition of AppNexus, one of the leading international advertising ad-exchanges. For the American telecommunications giant this operation represents a significant leap towards the advertising market and an opportunity to cash-in on the large volume of data they own. Telcos, in fact, own a great deal of first party data (relayed by users when activating the service) and can make it available to organizations operating in the data-driven advertising market, such as AppNexus, to enable crossing this data (i.e. gender, age, address of residence, payment trustworthiness) with navigation data so as to create increasingly accurate user profiles.

This announcement follows several other acquisitions of recent years made by Telcos in the advertising market and, in particular, in programmatic advertising in which data and technology are considered assets. In 2016, for example, Comcast acquired the advertising platform (now FreeWheel) – specialized in valorizing premium video inventory – and the Norwegian Telenor got hold of Tapad, offering a cross-device marketing solution. In 2017 the Asian company Singtel acquired the control of Turn (that in its offering includes a data management platform and a demand side platform to acquire audience in the programmatic advertising field), while the Dutch company Altice acquired Teads (popular demand side platform specialized in outstream video).

These events should be contextualized in the overall scenario that telecommunications have been in for some time now: a market that has declined significantly in many Countries over the last ten years (and in particular in Italy) and that has now stabilized but is on the lookout for new areas of business. Namely, one of them is Media (Adv and Pay): it is no coincidence that talks of a Telco-Media convergence have been going on for over a decade and in many Countries big Tlc operators are also Tv broadcasters. AT&T, for example, in its portfolio includes DirectTV (acquired in 2015), one of the leading pay TVs in the United States. Furthermore, with the Time Warner merger concluded a few days ago following an antitrust law suit, the company aims at moving from being distributor of video contents to producer.

The consolidation process taking place is the way to respond to the competitive pressure of the over the tops and of new players emerging in communications and media markets.

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