Microsoft to acquire Digital Ad Platform from AT&T

AT&T announced plans to sell its online advertising platform Xandr Inc. to Microsoft, a move that will welcome the Big Tech giant into the digital marketing field.

The tech titan stated that Xandr’s digital ad marketing strategies would fundamentally heighten advertising and retail media capacities.

Only last year, AT&T disclosed plans to put on the market its digital advertising operations, given it undesirably halted back its media ambitions.

In 2018, the telco purchased the advertising technology firm – previously known as AppNexus – for an estimate of $1.6 billion. The acquisition was the operator’s attempt to enter the advertising league, putting it in competition with Big Tech moguls, Google’s parent company Alphabet Inc., and Meta’s networking platform Facebook.

Xandr’s online ad exchange provides advertisers with the option of obtaining an opening spread on thousands of websites and targeting particular audiences. High official executives at the telecom operator yearned to leverage the profusion of data gathered by AT&T from its diversified businesses. This would’ve assisted advertisers in knowing where to invest their money.

“I have yet to speak to a [chief marketing officer], or an advertiser who says, ‘I wish I could spend more money with Google and Facebook’,” Randall Stephenson, AT&T’s then Chief Executive said in 2018 when addressing the firm’s intentions from the Xandr acquisition.

Xandr failed in generating the target revenue growth its leaders hoped to achieve and suffered from technical problems. In its third quarter, AT&T Warner Media unit, including Xandr, delivered $1.4 billion in advertising revenue, dropping 12 percent from the previous year.

The telco’s latest decision to spin-off WarnerMedia marked its latest act to unravel its bet on entertainment and direct its attention to its wireless business.Microsoft is considered one of the leading businesses shifting to invest in advertising technology. The COVID-19 pandemic played a fundamental role in promoting and boosting digital advertisement, with users supporting their time in online shopping and watching videos.

“Microsoft has been placing more of a focus on advertising in recent periods,” global president of business intelligence at GroupM, Brian Wieser, said in a statement.

“Buying Xandr will certainly help them to expand the business faster than might have been possible without it,” he added.