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AT&T Competes with Google and Facebook in the Digital Ad Market


Aug. 14 2018, Updated 9:00 a.m. ET

AT&T to buy AppNexus

AT&T (T) is looking forward to expanding in the media industry and unlocking new opportunities after its acquisition of Time Warner. The traditional wireless market in the United States is seeing intense competition and slowing down. 

AT&T is planning to focus on advertising and digital content distribution following the acquisition. According to Forbes, AT&T is planning to reduce prices for customers through advertising, by shifting some content creation costs from customers to advertisers.

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As a result, AT&T has entered into a definitive agreement to acquire advertising technology company AppNexus for $1.6 billion. The acquisition could be strategic for AT&T, considering the telecom company’s efforts to build a robust digital advertising business. AT&T would allow advertisers to purchase space to target audiences across various websites.

Digital advertising revenue

The digital advertising market is dominated by Facebook (FB) and Alphabet’s (GOOGL) Google. According to market intelligence company eMarketer, Google’s digital advertising revenue is anticipated to increase ~14.5% YoY (year-over-year) to $39.9 billion this year, whereas Facebook’s US ad revenue is anticipated to increase ~16.9% YoY to $21.0 billion. Meanwhile, total US digital ad spending is expected to rise ~6.6% YoY to $221.0 billion.

AT&T’s main competitor, Verizon (VZ), has been a player in the digital advertising market since its Yahoo and AOL acquisitions. Snapchat (SNAP), Amazon (AMZN), and Twitter (TWTR) are some of the smaller digital advertising providers competing with the two industry giants.

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