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AppNexus is key to AT&T’s plans to use HBO for more consumer data

New WarnerMedia CEO John Stankey says HBO is going to “change direction a little bit,” and it’s all about the advertising.

AppNexus is key to AT&T’s plans to use HBO for more consumer data
[Photo: courtesy of WarnerMedia]

There’s a lot to chew on in the leaked audio of WarnerMedia CEO John Stankey’s first meeting with HBO staffers a couple of weeks ago. Beyond the “new sheriff’s in town” tone and worries that the telephone man from Dallas wants to broaden (read: cheapen) HBO’s audience, one line pops out:

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John Stankey [Photo: courtesy of WarnerMedia]
“I want more hours of engagement,” said Stankey. “Why are more hours of engagement important? Because you get more data and information about a customer that then allows you to do things like monetize through alternate models of advertising as well as subscriptions, which I think is very important to play in tomorrow’s world.” [emphasis mine]

This takes things beyond a content arms race with Netflix. In fact, when it comes to worldwide subscribers, Netflix and HBO are actually neck and neck at roughly 130 million and 142 million, respectively. The key here is . . . well, you. More specifically, your consumer data and how AT&T can use HBO to learn more about you to then create more advertising products that can use that data to better attract more revenue. Which means this is very much about Google and Facebook.

And AT&T just happens to be the proud new owner of advertising technology platform AppNexus, and aims to use its advertising and analytics unit to muscle in on the current digital ad duopoly.

At Cannes Lions in June, AT&T advertising CEO Brian Lesser said, “The future state of the ad business is a platform business. Google and Facebook prove that platforms rule. When you make it easy for advertisers to efficiently buy at scale and generate performance, that’s what they will choose.”

Back when AT&T acquired AppNexus on June 25 (less than two weeks after closing the Time Warner acquisition), Lesser said, “ad tech unites real-time analytics and technology with our premium TV and video content.” The acquisition improves AT&T’s ability to leverage TV brands under its new WarnerMedia umbrella like CNN, TBS, and TNT to increase advertising revenue opportunities.

But perhaps its most valuable opportunities are with the content crown jewel of HBO.

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Stankey told the town hall that if HBO would like to end up as a heavyweight in the industry, it would need to add “other types of content” to its standalone streaming service, HBO Now. Could we be far away from a cheaper, ad-supported version of HBO Now? The challenge is finding a way to expand its footprint, and ability to attract more viewers and their data, without diluting or damaging what makes the brand so valuable in the first place.

As Stankey put it, “You’ve earned the dynamic amongst your customer base that when you put a new piece of content out there, people will try it, just because they trust you’re going to be putting something in front of them that they might like. We now need to figure out how to expand the aperture of it without losing the quality.”

For HBO and its culture, this would be shock enough. Now it might be the lead for a targeted advertising business that can scale and drive Google-type margins? As Stankey also told the assembled HBOers: “It’s going to be a tough year. It’s going to be a lot of work to alter and change direction a little bit.”

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About the author

Jeff Beer is a staff editor at Fast Company, covering advertising, marketing, and brand creativity. He lives in Toronto.

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