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State of the Screens

AT&T’s Ambitious Plan to Take On Facebook and Google for Ad Dollars

By June 20, 2018No Comments

Big news: The merger between AT&T and Time Warner has been approved by a federal judge.

The goal: Build an automated advertising platform that combines the best parts of digital (targeting/analytics) with premium video content.

Quote from Kelly Clark — CEO @ GroupM:
“Our clients want the highest quality programming informed by the highest quality data with the least amount of waste,”

Why this matters: This will bring one of the top catalogs of content (HBO, etc.) under the same roof as the #1 pay-TV provider and #2 mobile provider.

Top pay-TV providers:
1)
AT&T/DirecTV/Sling — 26.2M
2)
Comcast — 21.2M
3)
Charter Spectrum — 16.4M

Top mobile providers:
1)
Verizon — 151.5M
2)
AT&T — 143.8M

AT&T is well positioned to grow these subscriber numbers atmultiple price points.

Addressable TV homes in U.S.:
1)
Total — 60M
2)
AT&T/DirecTV/Sling — 15M (25% of total)

Quote from Tracey Scheppach– CEO @ Matter More Media:
“The cost per thousand impressions — a common currency for pricing TV ad units — for a targeted ad aimed at specific households can top $60, compared to an average of $10 for a national ad.”

Flashback #1: AT&T may be plotting to revolutionize TV advertising

Interesting perspective. If AT&T offers addressable advertising AND owns the networks the following occurs:
1) Ad pricing — A single ad impression increases 192% from 1.2¢ to 3.5¢ due to improved targeting.

2) Inventory — The number of 30s spots available to AT&T increases 600% from 4 to 28 now that they are both the cable provider and content owner.

3) Total impact — AT&T currently makes roughly $0.05 per hour (4 spots x 1.2¢), but that could increase to $0.98 per hour (28 spots x 3.5¢) if they accomplish #1 and #2.

Flashback #2: The Data-Driven Marketing Revolution Will Be Televised

Key points for potential market size:
1) Only 15% of advertisers are fully using addressable TV advertising
2) Less than 3% of TV advertising spend is addressable

More #1: AT&T’s Play Against The Duopoly Hinges On Scaled Addressable TV And Brand Dollars

More #2: Watch CNBC’s full interview with BTIG’s Rich Greenfield

More #3: AT&T, Time Warner and the Entire Media Merger Frenzy Explained

Michael Beach

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.