Performance Abstract.

Frank Foster: AT&T AdWorks

AT&T AdWorks (now Xandr) was the national advertising sales and analytics division within AT&T that sold television, digital search, display and mobile advertising to agencies and brands directly.  

The Challenge

In January 2009, AT&T wanted to build a local advertising business for its U-verse pay television platform. While AT&T owned a very large local advertising sales organization in Yellow Pages, they lacked the television advertising sales expertise necessary to generate the magnitude of revenue contemplated in AT&T’s plan. Instead of adding television to the Yellow Pages sales organization’s product set, the company decided to start a new organization that would hire the necessary advertising sales talent and industry experience.

My Role

Senior Vice President Television Ad Sales & Business Development

Within the AdWorks startup, my group developed the television advertising sales strategy and created the tactical roadmap that would deliver on the company’s revenue and profit goals. As local television advertising is typically sold by the largest cable operator in each market, we met with Comcast, Time Warner, Cox, Charter and Bright House to negotiate the terms of a representation agreement. Once AT&T corporate agreed to partner rather than compete with the cable operators in the local advertising space, we signed representation agreements with the operators in all of the AT&T local markets. 

The Work
  • Through personal relationships in the industry, we identified the monthly advertising revenue per subscriber cable operator delivered in each AT&T U-verse market. 
  • Then we went to the Yellow Pages market leaders and asked what investment they would need to deliver that level of revenue.
  • Once it was clear that the investment required was significantly more than the commission the partners were asking, we only had to overcome the idea of partnering with our competitors. 
  • Negotiations with the individual cable operators focused on contracted service levels, revenue expectations and term. While the talks were difficult, the agreement came together because the deal was a win-win for both AT&T and the cable operators.
The Outcome

Between 2009 and 2011, we grew television advertising revenue from less than $25 million to $185 million in 2010 and $304 million in 2011. More importantly, AT&T AdWorks exceeded corporate budgets by 42 percent in 2010, 20 percent in 2011, and 17 percent in 2012. Additionally, by exploring all options related to advertising revenue generation, AT&T was exposed to a variety of executives, partners and opportunities that opened the door for eventual acquisitions such as Warner Media and DirecTV.

AT&T AdWorks 2011 Year End Report

When the right business strategy is politically unpopular, stick to the facts--especially if those facts point to higher revenue and larger profits. Ditch the emotions and pitch the bottom line. 

––Frank Foster, SVP Television Ad Sales & Business Development