AT&T Folds Xandr Into WarnerMedia

xandr warnermedia

AT&T said Thursday it will combine TV ad tech division Xandr with WarnerMedia.

Xandr Chief Business Officer Kirk McDonald will continue to lead the group and report into WarnerMedia Chief Revenue Officer Gerhard Zeiler. Zeiler reports to John Stankey, AT&T’s new CEO.

“Xandr and WarnerMedia have always worked hand-in-hand to benefit our incredible advertising partners,” McDonald said in a statement. “This is the next logical step to help empower our clients and continue to ‘Make Advertising Matter’ for consumers. I look forward to the work ahead of us as one powerful combination.”

WarnerMedia and Xandr declined to comment further.

The tie up has been a long time coming.

AT&T launched Xandr in September 2018 with much fanfare and a mission to revolutionize the TV advertising business through data and automation. Xandr’s CEO at the time, Brian Lesser, reported directly to former AT&T CEO Randall Stephenson, underscoring Xandr’s key role in helping the telco monetize its $85 billion purchase of Time Warner.

Xandr progressed toward this goal by acquiring AppNexus, revamping its supply– and demand-side platforms for advanced TV buying and launching Community, a publisher network where buyers could buy digital media informed by AT&T data.

In October 2019, Xandr bought linear TV SSP Clypd, and in March began representing inventory from Disney and AMC Networks. Xandr grew revenues nearly 15% in Q1 2020.

But in March 2020, just as Xandr’s marketplace started to gain traction, Lesser resigned.

The ad unit reportedly missed internal revenue projections due to weak demand for its targeting and measurement capabilities. Around the same time, AT&T was getting pressure from activist investor Elliott Management, which did not agree with Stephenson’s vision to transform AT&T into a modern media company.

For some time, buyers had felt that Xandr needed to make more progress toward its goal to enable cross-platform buying and measurement leveraging AT&T data. They also complained of a confusing go-to-market strategy and alignment with WarnerMedia.

And at WarnerMedia, divisions such as gaming and entertainment that wanted to use Xandr data for their own projects were frustrated by roadblocks due to operating on separate P&Ls, according to Xandr employees.

Early this year, Xandr and WarnerMedia signaled they’d tighten their partnership, announcing a joint upfront presentation (ultimately canceled due to the coronavirus pandemic) and go-to-market strategy for 2020. WarnerMedia executives had become more involved in Xandr meetings even before Lesser left, according to Xandr employees.

Networks already had competitive concerns about selling their inventory through Xandr, since it was a sister company to WarnerMedia. Now that the two companies have combined, it’s unclear how much appetite TV sellers will have to work with Xandr going forward.

James Hercher contributed.

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