The end of AppNexus, the start of Xandr: Michael Rubenstein reflects one year after AT&T's acquisition

It has been one year since AT&T completed the acquisition of AppNexus, and it’s safe to say a lot has changed. There's been new products launched and partnerships struck. At the same time, the co-founder has left, and the AppNexus brand is slowly being wound down, reborn as Xandr.

As the evolution has played out, within the industry two diverging narratives have emerged. On one hand, what was once one of the biggest independent adtech firms in the world has now become a cog in AT&T’s machine. On the other, it now has the investment it needs to square up to Google, Facebook and to a lesser (but growing) extent, Amazon.

President Michael Rubenstein, who has long trumpeted the need for a “true alternative to the walled gardens”, believes AppNexus has been building up to “exactly this opportunity”, an opportunity to “turbo-charge” its technology, talent and relationships.

“AppNexus built one of the world’s leading adtech companies over the last decade or so, under extremely challenging circumstances it presented a real alternative to platforms like Google in the marketplace,” says Rubenstein. “But the opportunity to team up with AT&T and leverage the assets and kind of investment that a company the size and scale of AT&T has—that is an extraordinary opportunity.”

Michael Rubenstein

Speaking exclusively to Campaign fresh from the company’s Sydney roadshow event, Rubenstein says his priority over the last year has been evolving AppNexus into the new business, Xandr.

Named after AT&T founder Alexander Graham Bell, the entity consolidates AT&T’s advertising, data and analytics businesses under one roof, including AppNexus, ATT.net and AdWorks. The unit supports AT&T’s more than 170 million direct-to-consumer relationships across its wireless, video and broadband businesses.

“We are in the process of erasing the line between AppNexus and Xandr and creating this new business inside AT&T that can fully leverage all the company’s assets,” he says. “As we are launching new products in the market, we are talking about ourselves as Xandr, and the AppNexus brand will start to go away.”

Rubenstein has been AppNexus’ president for a decade, and as a former Google ad exec has played a crucial role in establishing the business as an independent force against the internet’s walled gardens. Is there a glimmer of grief, in seeing the brand he helped to build faded out?

“More than anything there’s a feeling of excitement,” he says. “In life there is always some bittersweetness when you move to the next chapter, but we are moving to an exciting chapter and the marketplace is excited about what we are building.”

While acquisition and consolidation is often followed by job cuts, Rubenstein claims the “quite the opposite” is true for AppNexus, especially in Asia, where AT&T did not have a significant advertising presence prior to acquiring the business.

“We are hiring, we are launching new products in the market, and we are forming new partnerships with companies around the world that need our help, and we need their help,” he says. “AT&T sees this as an opportunity for the company and one it is investing in rather than paring back.”

Xandr is itself looking to make acquisitions where it sees a gap in its offering, but Rubenstein would not provide details of what kind. He simply promises “We are just getting started”.

“This is the tip of the iceberg for us and you should expect to see quarterly releases and announcements that will be aggressive and innovative,” he says.

Balancing being a one-stop shop for AT&T, while serving external partners

A number of announcements over the past year have given the impression that AppNexus may be pulling away from the industry, a notion that Rubenstein is quick to address.

“One thing that hasn't changed about the business, whether it is AppNexus or Xandr, is we operate in a very partner-centric model, we don't go it alone,” he says. “It is core to our mission and DNA to work with third parties.”

Shortly after completing the acquisition, AT&T withdrew AppNexus from the Advertising ID Consortium, a shared industry cookie ID that the adtech firm helped co-found in 2017. Then in April, it pulled WarnerMedia out of the industry's ad consortium OpenAP.

Rubenstein says it doesn’t spell the end for AppNexus’ involvement in joint initiatives, but that it has to be “selective in what we support”.

“We will be supportive of those initiatives that we think will move the needle in creating a better and more prosperous marketplace for the greatest numbers of buyers and sellers,” he says.

In Asia, AppNexus is a technology partner of the Singapore Media Exchange, the digital alliance between Singapore’s biggest publishers Mediacorp and Singapore Press Holdings (SPH).

AT&T’s commitment versus other telcos

Positioning Xandr as a separate business unit within AT&T, that sits alongside the media business rather than within it, gives it “real independence”, Rubenstein claims.

The unit reports directly to the chairman and CEO of AT&T, Randall Lynn Stephenson, giving it “high visibility and priority within the company” Rubenstein says. In his mind, this shows that AT&T has committed to building a scaled advertising platform in a way that other telcos which have made similar acquisitions have not.

“What Verizon proved was that if you are not willing to go all-in on the bet then it is not worth making. AT&T understands that and has committed itself to making deep investments to create a truly world-class advertising business,” he says. Rubenstein is no stranger to M&A activity—he was a longstanding executive at DoubleClick when it was acquired by Google in 2008.

International a ‘huge priority’

While the business’ new products have been US-heavy, Rubenstein says international is a “huge investment priority for Xandr”.

“AT&T recognises that in order to build a truly scaled and world-class advertising business we need to be global because many of our clients have multi-region businesses and require a partner that can work with them around the world,” he says.

Xandr has launched two key products this year, a DSP buying platform Invest that will serve as a central hub for WarnerMedia properties, and a premium video ad marketplace, Community. Community will curate video content from across WarnerMedia networks, as well as from outside publisher partners like Vice and Tubi. Partners are currently limited to the US, but Rubenstein’s ambition is to grow this in other markets.

“We may launch Community in other regions around the world but with different partnership models,” he says. “We are going to adopt strategies on region-by-region basis that are bespoke, and that make sense for the market we are doing business in.”

Rubenstein’s role as AppNexus becomes Xandr

The question on many advertising executive’s lips is how long Rubenstein will stay on at the newly formed unit following the departure of AppNexus’ lynchpin, co-founder and chief executive Brian O’Kelley. O’Kelley stepped back to become a strategic advisor to the business in October, but as of February it appears as though he no longer has any connection to the company, according to his LinkedIn.

O’Kelley’s pivotal role within AppNexus left the industry questioning what the future of the business would look like without his vision and stewardship — and how much its independent spirit would be eroded.

But Rubenstein remains resolute in his vision for Xandr to become a “true alternative to the walled gardens”. His challenge will be to convince the industry Xandr can be a neutral partner while sitting alongside a mass media business. He would not be drawn on what he sees as his role over the next period of AppNexus’ evolution, but for now Rubenstein remains, a bastion of independence in a giant conglomerate.