AT&T’s Xandr Works for Closer Ties With WarnerMedia (EXCLUSIVE)

At Xandr, the ad-technology firm that is part of AT&T, the time to start talking about the advertising of the future is now.

The AT&T unit is best known, perhaps, for selling commercial inventory related to the company’s DirecTV. But Xandr CEO Brian Lesser expects to be recognized soon for taking part in many other areas of the telecommunications-and-media giant.

Already, Xandr is in talks with the ad-sales team at AT&T sibling WarnerMedia about how best to team up and sell to Madison Avenue during the TV industry’s annual “upfront” sales session next year. “We are working together to go to upfront next year. We are working with them now to figure out how we are going to do that,” says Lesser, during an interview Friday in the company’s midtown headquarters. A WarnerMedia spokeswoman declined to comment on the format of the company’s upfront in 2020.

Executives are also at work, Lesser says, devising new commercial formats for the ad-supported version of HBO Max, the streaming-video service that AT&T expects to launch in 2020. The ad-supported version is currently expected to debut sometime in 2021, says Lesser, “if not sooner.”

The steps Xandr (the name is a 21st century tip-of-the-moniker to phone progenitor Alexander Graham Bell) is taking could put it closer to the heart of a company that has been working aggressively to make its mark in the video-entertainment sector. Yes, WarnerMedia and DirectTV are big assets in the media industry, but it’s Lesser’s unit that is quickly turning into the company’s monetization engine. While WarnerMedia ramps up the creation of video content to bring audiences to screens big and small, and DirecTV tries to establish a connection in consumer homes, it’s Xandr’s job to find new ways to get Madison Avenue into the mix and provide financial fuel.

“What we want to get to is we want to say to one of our clients, ‘You can now reach the audience you want to reach across any program, in any device’,” he explains.

Lesser is one of many media executives waging a quiet but intense battle to win over advertisers who are moving away from the traditional ways of buying TV ads and placing new emphasis on digital alternatives. Armed with swirls of consumer data from loyalty programs and set-top boxes, advertisers are better able to understand where they can find distinct consumer types, like first-time car buyers or expectant mothers, and run their commercials accordingly. For some marketers, running ads across different viewing experiences might be more efficient than airing commercials solely in day-and-date primetime TV.

But others are rushing to win this category as well. Rivals like Fox Corp., ViacomCBS and NBCUniversal operate Open AP, another new video-ad marketplace that lets advertisers establish and define consumer niches, and then buy those audiences across many different companies. WarnerMedia, a founder of Open AP before it was acquired by AT&T, walked away form the organization earlier this year, and many media executives believe it was because of the importance the new corporate parent places on Xandr. Indeed, Xandr earlier this year founded a marketplace called Community that includes not only WarnerMedia assets but also A+E Networks, AMC Networks, Bloomberg, Vice, Vudu, Hearst Magazines, Tubi and Xumo.

“There are a lot of players and competitors in this space,” says one media buying executive.  Lesser says Xandr, which saw its employee base grow to 1800 from around 1200 earlier this year, intends to keep hiring in 2020.

It is not a job without a certain amount of pressure. Xandr was only established in 2017, charged with building out the ability to sell new kinds of advertising. WarnerMedia has for years sold TV commercials, and, more recently offered to help advertisers place those commercials more precisely through use of data about specific kinds of viewers and how they can be found. Xandr’s heft is built primarily on its sale of so-called “addressable” ad inventory available on DirecTV – the kind of ads that can be placed and sent to particular niches of subscribers – and, more recently, a distillation of data culled from set-top boxes and customer connections.

AT&T’s desire to move more aggressively into this arena has been hard to miss. In 2018, the company boosted its new ad-tech unit with the acquisition of AppNexus, a technology unit that assists in so-called “programmatic” placement of commercials, or automated assignment of where ads ought to run based on specific online audience attributes. More recently, Xandr acquired clypd, another technology firm that assists in similar placement of ads on traditional TV. Many companies can place ads in digital realms. But AT&T, thanks to its many acquisitions in recent years, has built up new bulk in traditional TV, satellite, and broadband.

Lesser has faced some headwinds, including skeptical media buyers. The recent acquisitions represent “some sort of effort to be this marketplace hub for all the different networks to take part. I don’t see how Disney, Comcast or Discovery, all these guys, are going to want to play ball with AT&T in that way,” says one media-buying executive. But Lesser says he expects Xandr’s efforts to continue. “We are going to greatly expand our marketplace,” he says. “You will see more partners.”

Some buyers say they have at times been confused as to whether they should deal with WarnerMedia or Xandr. Indeed, there is an expectation the two will only move closer together, a sentiment with which Lesser agrees. “I would expect the two organizations, the WarnerMedia ad sales team and Xandr, to get closer and closer over time,” he says. “In fact, that’s already happening.” Lesser declined to comment when asked about how ad-sales leadership at WarnerMedia might develop in the wake of the departure of Donna Speciale, the former president of WarnerMedia’s ad sales efforts.

There has also been some confusion as to whether Xandr’s main purpose is to sell addressable DirecTV inventory or a broader suite of products. Lesser acknowledges that the unit’s main source of revenue comes from the DirecTV sales, but notes the expansion to other types of sales and management is of great importance. “If there is confusion, it probably comes from this pivot we are making from selling addressable television to our sale of a premium advertising marketplace across multiple channels and devices,” he says. “This brand is only a little bit over a year old.”

Meanwhile, there are other tasks to consider. Lesser says Xandr is “working to build the different types of advertising formats in the ad-supported version of HBO Max.” He does not envision a time when HBO series like “The Sopranos” or “Watchmen” have commercial breaks built into them or are accompanied by ads. But some content slated to be part of the project will not be portrayed as part of the classic HBO offering, he suggests, and that will contain commercial inventory. “HBO Max is not only HBO content. HBO Max has other content that is complementary, and I think that’s where the advertising opportunity is for us.”


More TV

  • What to Watch on TV This

    What to Watch on TV This Week: ‘Picard' Premieres and 'Shrill' Returns

    Welcome back to Tune In: our weekly newsletter offering a guide to the best of the week’s TV. Each week, Variety’s TV team combs through the week’s schedule, selecting our picks of what to watch and when/how to watch them. This week, “Star Trek: Picard” beams into existence on CBS All Access and “Shrill” returns [...]

  • SAG Awards 2020: What You Didn't

    SAG Awards 2020: From Charlize Theron to 'Parasite,' What You Didn't See on TV

    Brad Pitt made a crack about his marriages. Robert De Niro got political. And Jennifer Aniston talked about appearing in a commercial for Bob’s Big Boy. Those were just some of thing that happened on stage at the SAG Awards that were broadcast on TNT/TBS on Sunday night. However, Variety was inside the Shrine Auditorium [...]

  • Edges Unknown

    TCB, Cineflix, All3Media Announce Sales Ahead of NATPE Miami

    Miami’s NATPE market kicks off on Tuesday, but deal announcements are already landing. London-based TCB Media Rights has sold 130 hours of content to Latin America, Cineflix and National Geographic Latin America closed a deal for four titles, and Discovery Latin America picked up popular makeover format “10 Years Younger” from All3Media. TCB’s 130 Hours [...]

  • U.K. Broadcaster Channel 5 Readies Thomas

    U.K. Broadcaster Channel 5 Readies Thomas Markle Documentary

    ViacomCBS-backed U.K. broadcaster Channel 5 will air a 90-minute documentary on Meghan Markle’s father Thomas Markle. Markle and her husband Prince Harry sparked a global media frenzy earlier this month with their decision not to continue as senior members of the British Royal Family. Buckingham Palace announced that the couple are to lose their royal [...]

  • Tony Hall BBC Director General

    BBC Boss Tony Hall Lands at U.K.'s National Gallery

    BBC director general Tony Hall has been appointed chair of the board of trustees of the National Gallery. The executive, who has served on the Gallery’s board since November, takes over as chair from Sir John Kingman, who has been interim chair since Hannah Rothschild stood down from the role in September. Hall said: “The [...]

  • Fox TV Stations Greenlight 'Central Ave'

    Fox TV Stations Greenlight 'Central Ave' From Will Packer, Debmar-Mercury

    Fox Television Stations has ordered the weekly entertainment news magazine “Central Ave,” which hails from prolific film and TV producer Will Packer and Lionsgate’s Debmar-Mercury. Debmar-Mercury and Will Packer Media will produce two half-hour shows per week of “Central Ave,” which tackles pop culture and other topics from a “socially conscious and diverse lens,” per [...]

  • Frontrunners Emerge As BBC's Tony Hall

    Frontrunners Emerge as BBC Boss Tony Hall Set to Leave Broadcasting Behind

    As the U.K. industry reacts to news of Tony Hall’s intention to depart the BBC this July, top-level executives including Charlotte Moore and Tim Davie as well as external contenders such as Channel 4’s Alex Mahon are beginning to emerge. Variety understands that Lord Hall, who has headed the BBC for seven years as director [...]

More From Our Brands

Access exclusive content