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Why AT&T Unit Acquired Influencer Marketing Platform

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May. 3 2018, Updated 6:35 a.m. ET

70% of American marketers see influencer marketing budgets rising in 2018

Fullscreen, the digital media services owned by Otter Media, recently acquired influencer marketing platform Reelio for an undisclosed amount. Reelio helps brands discover talent or influencers to complement their regular marketing efforts. 

As an influencer agency, Reelio competes with Twitter’s (TWTR) Niche unit, which is also engaged in the business of connecting Internet stars with brands that can pay for their talents. Influencers are Internet stars with sway over a large base of potential customers, especially young people.

Fullscreen is banking on the acquisition of Reelio to enable it to offer a wider range of marketing services. Influencer marketing is a growing phenomenon in the US, with ~70.0% of American marketers expecting influencer marketing budgets to increase this year.

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AT&T interested in full ownership of Fullscreen parent

Otter Media, the parent of company of Fullscreen, is a joint venture of AT&T (T) and Chernin Group. AT&T and Chernin committed $500.0 million to fund Otter Media. Last year, AT&T was reported to consider taking full ownership of Otter Media by buying out its joint venture partner, Chernin.

Matching Verizon’s Oath

Perhaps AT&T is looking at Otter Media as its potential answer to Verizon’s (VZ) Oath, the digital media and advertising business created from the AOL and Yahoo assets. Oath took 11.8% of all digital marketing budgets in the US last year, tying Microsoft (MSFT) as the third-largest online ad seller behind Facebook (FB) and Alphabet’s (GOOGL) Google, according to eMarketer. AT&T’s revenues fell more than 0.23% year-over-year to $41.7 billion in 4Q17.

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