Inside AT&T’s Effort to Revolutionize TV Advertising

AT&T CEO Randall Stephenson hopes to transform the telecom giant into a media powerhouse with the help of a new targeted advertising business. But he’s run into a major snag: Rival TV networks and major cable operators, which he needs to support the new business, don’t want to play along. Some, like Comcast and a separate consortium of TV networks, are pursuing their own, competing efforts.

Friction between executives at AT&T and within its newly acquired Time Warner—now called WarnerMedia—made it difficult for AT&T to tap Time Warner’s expertise in TV advertising, at least initially. The new advertising unit, named Xandr after Alexander Graham Bell, was meant to create a counterweight to the advertising muscle of Facebook and Google. But AT&T’s struggles demonstrate how hard it will be for the telecom giant to squeeze growth from the media businesses it has acquired, Time Warner and DirecTV, which are being hurt by cord-cutting in the pay TV industry.