Xandr, the advertising unit of AT&T, is merging with WarnerMedia in order to create what the company calls “a better advertising value proposition for brands, publishers and consumers alike.”
As part of the move, Gerhard Zeiler, WarnerMedia’s chief revenue officer and international president, will oversee all advertising responsibilities across AT&T. Kirk McDonald, Chief Business Officer, Xandr will continue to lead Xandr, reporting directly to Zeiler.
The reorganization follows the exit of Brian Lesser, head of Xandr. It is also the first major strategic play by John Stankey since he took the reins as AT&T CEO. Stankey’s predecessor, Randall Stephenson, oversaw the acquisition in 2018 of ad-tech firm AppNexus, which was renamed Xandr, a flippant shorthand for Alexander Graham Bell, the telephone and AT&T founder.
The business units are combining less than a month before WarnerMedia launches streaming service HBO Max. It will be an ad-free subscription service initially, but in 2021 will add an ad-supported version, roughly comparable with the different tiers of Hulu and CBS All Access and NBCUniversal’s just-launched Peacock.
“We are in unprecedented times that amplify the priority across both WarnerMedia and Xandr, to deliver valuable results and outcomes for our agencies and clients,” Zeiler said. “Now more than ever, we need to simplify advertising and further our marketplace capabilities for our customers. This is done through one holistic conversation that spans premium content and trusted environments, alongside proven and advanced ad capabilities.”
WarnerMedia and Xandr had already been taking some initial steps toward collaboration, announcing plans to join forces for an upfront presentation to advertisers this spring.
There is still a question among industry executives, advertisers and AT&T investors about the long-promised synergy between the advertising capabilities of AT&T and the entertainment content of WarnerMedia. That combination is going to be under the spotlight as HBO Max reaches the market in both its pure subscription and advertising-based versions.
“Xandr and WarnerMedia have always worked hand-in-hand,” McDonald said. “This is the next logical step to help empower our clients.”
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