AT&T Is Focusing on Targeted Advertising Business
Expansion of media and advertising business
AT&T (T) is looking to its potential deal with Time Warner (TWX) to expand in the media industry and unlock new opportunities amid stiff competition and the slowdown in the traditional wireless market in the US. Industry giants like Comcast (CMCSA) and Verizon (VZ) are also cooperating with the media and entertainment sectors to diversify and improve their customer base. Verizon recently completed its acquisition of Yahoo’s media assets.
The merger seems to be necessary for AT&T, as Time Warner’s broad mix of media assets has the potential to enhance AT&T’s presence in the media and advertising industry. In fact, the combination of Time Warner’s high-quality media assets with AT&T’s large user data and technology should significantly boost its advertising business in addition to making AT&T’s wireless phone services more appealing. Also, AT&T is expected to target a large number of customers through its effective ads.
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Targeted television ads
AT&T is striving to provide targeted TV ads that are more promising than those in the traditional media advertising market. Targeted advertising allows marketers to select the TV audience they want to reach, whereas AT&T intends to enable advertisers to purchase ad placements automatically, which is known as programmatic advertising.
According to market intelligence company eMarketer, US TV programmatic ad spending will grow 78.0% to $32.6 billion by the end of 2017 and then reach $45.7 billion by 2019.
Tech giants such as Alphabet’s (GOOGL) Google, Facebook (FB), and Twitter already have a strong foothold in the advertising industry. Thus, AT&T’s expansion in television-targeted and programmatic ads services could present fierce competition to these online advertising giants.