Can AT&T Disrupt the Status Quo in Online Advertising?

For many years now, Google and Facebook have held a vice-grip on the online advertising business. Companies that wanted exposure online, went there first and second, with everything else a distant third (YouTube is owned by Google).

Now, though, there’s a new player with the deep pockets and digital reach to play spoiler and, potentially, shift the market… if they manage their messaging properly.

AT&T recently announced a new advertising business called Xandr, which has been founded with the mission to “create a marketplace for targeted TV and online video advertising,” according to CNN. How would this disrupt the market? AT&T CEO Randall Stephenson has the answer:

“If you can make the premium video side operate and behave more like the digital side, people will invest more and be excited about the advertising model on that side…”

The key, according to Stephenson, is to tailor the advertising messages viewers watch, much like ads are tailored on social media or through search results. Ads would be connected based on demographics and, potentially, search results, collated and shifted in real time much like suggested ads on YouTube or Amazon.

If successful, this dynamic would certainly shift how TV advertising is done. Instead of everyone who’s watching seeing the same ads every time, advertisers would create targeted ads for specific demographics, who would then be matched up with those ads based on a series of specified criteria.

Since AT&T’s recent acquisition of Time Warner, the company owns WarnerMedia properties  including CNN, TNT, HBO, and other huge cable and streaming entertainment brands. If they package and deliver this opportunity properly, they could find success quickly and change the way TV advertising is done, almost by default. After all, if a brand is forced to create targeted ads for multiple different channels, they will likely want the same specificity from other content deliverers. This implied request would force other networks to consider the same changes.

Xandr CEO Brian Lesser was pretty clear on this in his comments about the initiative: “We have data, we have great content. We have direct-to-consumer distribution… and we have the technology… (Our goal) is to be a premium marketplace” for buying TV and web advertising.

If successful, this could be the bridge between cable TV and web programming that content providers have been looking for. It’s been tough for cable networks to break into web advertising, because Facebook and Google owned the industry. Now, for the first time, instead of having to “sell” consumers on their way of doing things, a network with connections to both cable and streaming can just do it, building customer buy-in and managing expectations in the process. Again, as long as they get the messaging right.