AT&T's media and video-based services are to continue with a traditional ad-based revenue model, although those ads might not be served in a traditional manner in the future. This is based on comments provided by AT&T's Advertising and Analytics CEO, Brian Lesser as part of an interview with CNBC during this year's Cannes Lions International Festival, in France.
What Lesser did make abundantly clear is how ads are a necessity in this industry and one which AT&T seemingly has no plans on moving away from anytime soon, in spite of also acknowledging how "everybody still hates advertising." When directly asked on whether a subscription-based model for on-demand video could work, Lesser pointed out that although this type of model is beneficial, it is not enough on its own to sustain the amount of content being produced. Which Lesser states, is more now than ever before. As a result, ads are going to continue in AT&T's foreseeable future. However, what did prove highly interesting is Lesser — and AT&T — wants to redefine — and in some ways, revolutionize what ads are, and more specifically, how they are delivered.
While Lesser did not go into specifics on this, he did provide one hypothetical scenario which highlights the type of method AT&T is considering for ad distribution – a second screen. Lesser specifically commented on how AT&T wants to 'lessen the load' of ads targeted at users and in particular remove the idea that ads have to interfere and interrupt the fluidity of the content. Lesser used the example that instead of a movie or TV show breaking to ads, technology could be used to allow the content to continue to play as normal but with a small icon showing up somewhere on the screen which informs the viewer of an available mixed-reality experience for a specific product (likely one relevant to the content being watched) on another device – for example, a smartphone. When asked if AT&T already has the technology to offer this sort of experience, Lesser stated, it does. Although Lesser also did highlight how AT&T 'needs more tech' if it's to realize its future ad business ambitions.