AT&T Inc.
is combining its WarnerMedia and Xandr business units—which has long been expected by company insiders—in an effort to have a single advertising sales and technology offering across the company.
Xandr has been at the center of AT&T’s efforts to build a so-called advanced advertising business. It aims to use the telecommunications giant’s wireless, broadband and pay-TV customer data to help advertisers reach custom audiences across screens. Xandr also offers digital publishers and TV networks tools to help sell their ad inventory.
AT&T built Xandr in 2018 from existing ad businesses including its advanced TV unit AdWorks and the advertising technology company AppNexus, which it acquired that year.
The Xandr business unit generated $489 million in first-quarter revenue, up nearly 15% year over year, according to AT&T’s earnings report. Some of the revenue booked under Xandr comes from AT&T’s pay-TV businesses including DirecTV.
AT&T’s WarnerMedia unit houses TV networks including TBS, TNT, Cartoon Network and CNN as well as various digital properties. It was formed following AT&T’s acquisition of Time Warner in 2018.
Xandr has previously faced criticism from WarnerMedia ad sales executives who called AppNexus’s technology underwhelming, citing the company’s background in display ads, not video.
Current and former WarnerMedia and Xandr executives have long expected that the two units would eventually combine.
Xandr’s chief executive officer, Brian Lesser, resigned in March.
A combined WarnerMedia and Xandr will accelerate work on new ad formats next year for AT&T’s forthcoming streaming service HBO Max, the company said. HBO Max is scheduled to debut on May 27 without ads, but an ad-supported version is in the works.
Xandr will remain a separate team under WarnerMedia, said a Xandr spokesman. Both groups will be overseen by Gerhard Zeiler, chief revenue officer of WarnerMedia and president of WarnerMedia International. Mr. Zeiler will now be responsible for all advertising functions across AT&T, the company said.
Kirk McDonald, chief business officer of Xandr, will continue to lead the unit and will report directly to Mr. Zeiler.
There are no layoffs planned, the Xandr spokesman said.
Write to Sahil Patel at [email protected]
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