Telcos like AT&T are making a move into the digital advertising industry in an effort to dent, if not upend, the Google-Facebook duopoly. AT&T’s proposed merger with Time Warner, which awaits Department of Justice approval, could also be a way to break up the duopoly.
According to interviews with three media buyers, AT&T is actively talking to media agencies about its programmatic offering. “They talk a lot about brand safety,” said one buyer. “But they’re also more and more interested in the OTT space.”
The company is pitching buyers the “AT&T digital video advantage,” according to a pitch deck obtained by Digiday. It touts a high completion rate — between 95 and 97 percent, according to video ad company FreeWheel — and because it’s TV, $0 lost to ad fraud.
AT&T’s pitch is about TV and OTT advertising, including programmatic, at significant scale. Outside of Hulu and CBS All Access, there aren’t many services offering national scale for OTT advertising. CBS claims about 4 million subscribers between CBS All Access and Showtime. Hulu has 17 million subscribers across its subscription streaming and live TV offerings. Hulu’s live TV service has about 150,000 subscribers, according to Guggenheim Securities. Essentially, if a buyer wanted to buy OTT or television inventory online, options were limited.
In a fireside chat in mid-January at the AdExchanger Industry Preview event, Brian Lesser, AT&T’s advertising and analytics CEO who joined the company from GroupM, made brand safety the cornerstone of his pitch. He said marketers spend a lot of money on Facebook and Google, but the two platforms lack a “quality environment” for brand advertisers, especially in the digital video space, so AT&T can fill that void.
“When marketers go out and buy TV and video advertising, they deal with lots of small marketplaces,” said Lesser. “So who has the assets to build a better platform? On top of the list is AT&T.”
Through DirecTV and DirecTV Now, AT&T is pitching a programmatic direct private marketplace across the company’s OTT play. Inventory, according to the deck, can spread across “male,” “female” and “adult,” with network-level targeting available.
The sales team at AT&T is not yet divided into categories like auto or insurance, according to buyers. It’s approaching agencies in a more specific way. One buyer said agencies can call to ask for what they want, and AT&T sales teams will run the request upstairs and see what’s possible.
The deck compares DirecTV Now with competitors, including Amazon Video, YouTube TV, Netflix and Hulu.
“I think the world needs an alternative to big-scale digital marketplaces,” said Lesser last month. “And we have the opportunity to build the biggest marketplace.”
See the full pitch deck below.