AT&T Exits The Ad Business As Merger Ambitions Continue To Unravel

from the another-one-bites-the-dust dept

We've noted for years how U.S. telecom giants aren't particularly competent when it comes to wandering outside of their core competencies (building and running networks, lobbying the government to hamstring competitors). As government pampered regional monopolies who haven't had to try particularly hard for decades, stuff like competition, innovation, adaptation, and creativity are often alien constructs.

It routinely shows in the failed products they try to launch: mobile payment platforms that share names with terrorist organizations; Millennial-targeting streaming video platforms nobody actually wanted to watch; news websites that aren't allowed to write about the news; "me too" apps, app stores, and other products that can't compete.

AT&T in particular has showcased telecom's knack for face plants with its $200 billion acquisitions of DirecTV and Time Warner, which was supposed to cement the telecom's place as an advertising and mobile media giant. Instead, the company somehow managed to lose millions of subscribers while laying off tens of thousands of employees, despite receiving no shortage of regulatory favors and tax breaks to make it easier to succeed.

After recently spinning off the entire media fiasco, AT&T's now jumping ship from its ad ambitions as well as it tries to recover from the massive debt load creating by its megamerger fiasco. The company last week quietly announced it would be selling Xandr, its programmatic advertising marketplace, to Microsoft:

"AT&T formed Xandr in September 2018, combining its TV and digital advertising businesses, including digital ad marketplace AppNexus, which the telco bought for a reported $1.6 billion that year. ...Xandr had ambitions of becoming a dominant player in cross-platform advertising."

Again though, none of AT&T's ambitions worked out. In part, employees have consistently noted, because AT&T executives were cocksure, thought they knew better, and generally didn't bother to listen to folks with expertise in the markets they were trying to disrupt. A year out past the wreckage and AT&T executives still haven't really accepted their role in the entire mess, spending a lot of time claiming they're not getting enough credit.

That hubris stems from being an industry that historically hasn't had to listen to anybody, compete, or generally innovate (outside of which network technologies to adapt, or which anti-competitive lobbying strategies to adopt). But investors demand their pound of flesh in the form of quarter over quarter results. Having cut as many corners as they can on broadband deployment and customer service, that growth has to come from somewhere, so it routinely comes from pushing into business sectors telecoms lack the core competency to play in.

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Filed Under: advertising, telcos
Companies: at&t