U.S. Markets closed
  • S&P 500

    -55.26 (-1.29%)
  • Dow 30

    -292.30 (-0.86%)
  • Nasdaq

    -260.08 (-2.01%)
  • Russell 2000

    -43.38 (-2.17%)
  • Crude Oil

    -0.59 (-0.65%)
  • Gold

    -10.90 (-0.62%)
  • Silver

    -0.50 (-2.56%)

    -0.0048 (-0.4721%)
  • 10-Yr Bond

    +0.1090 (+3.78%)
  • Vix

    +1.04 (+5.32%)

    -0.0109 (-0.9163%)

    +1.0680 (+0.7861%)

    -1,618.38 (-7.10%)
  • CMC Crypto 200

    -36.72 (-6.78%)
  • FTSE 100

    +8.52 (+0.11%)
  • Nikkei 225

    -11.77 (-0.04%)

AT&T Closes AppNexus Buyout to Go Deep Into Digital Ad Realm

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

AT&T Inc. T recently completed the acquisition of AppNexus, a technology firm that operates the world’s largest independent marketplace for digital advertising. The transaction is likely to augment AT&T’s foothold in the digital ad sales market, which is virtually commanded by Facebook, Inc. FB and Alphabet Inc.’s GOOGL Google.

With more than 34,000 publishers and 177,000 brands transacting in the marketplace, AppNexus allows advertisers to buy space across thousands of websites, targeting their desired audience. It helps publishers to manage ad space on their sites as well as aids ad agencies to purchase various ads. The transaction, valued at around $1.6 billion, is therefore expected to place AT&T deeper into the digital ad realm.

The acquisition will also offer the requisite wherewithal to better compete against its rival Verizon Communications Inc. VZ, which already has a significant presence in online advertising after its 2015 acquisition of AOL for $4.4 billion. Verizon also purchased the digital assets of Yahoo in 2016 for $4.8 billion and merged them with AOL to create a new company — Oath — which is currently introducing extended reality ad for marketers.

Oath is using brand advertising intelligence to help marketers build emotional connections with their customers through new 3D ad formats and first-in-market programmatic virtual reality (VR) ads. The programmatic VR enables advertisers to seamlessly extend existing display and video assets into fully immersive and consumer-first VR environments. On the other hand, 3D ads take brands to the next level by creating an interactive experience for customers, allowing them to explore objects and make informed decisions.

By leveraging AppNexus’ digital prowess and online-advertising software, AT&T aims to negate the advances of Verizon and consolidate its position in this booming market. The company’s recent acquisition of Time Warner Inc. has further offered an unrivalled access to TV ad space from channels like TNT, TBS and CNN, in which it already had a fair presence through DirecTV business.

AppNexus will form an integral part of AT&T advertising & analytics business, led by CEO Brian Lesser. The successful integration of the AppNexus platform across AT&T’s advertising & analytics business is likely to bring new capabilities to the market, improving the overall value of its robust ad-supported premium video content portfolio such as Turner Networks, Audience Network and Otter Media. The transaction also extends AT&T’s advertising and analytics’ footprint worldwide, expanding its reach in various markets across the Asia-Pacific, Australia, Europe and Latin America.

All these initiatives reflect this Zacks Rank #2 (Buy) stock’s inherent potential. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AT&T has underperformed the industry in the past year with an average loss of 13.6% compared with a decline of 3.5% for the latter. Whether such strategic acquisitions can benefit the shares of the company in the future remain to be seen.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Facebook, Inc. (FB) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
AT&T Inc. (T) : Free Stock Analysis Report
Verizon Communications Inc. (VZ) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research