Xandr Acquisition: Key Details, Impact, and What Comes Next

Microsoft's acquisition of Xandr from AT&T, completed on June 6, 2022, marks a significant move in the digital advertising landscape. This strategic purchase aims to enhance Microsoft's advertising solutions, leveraging Xandr's technology to respect consumer privacy and improve advertising outcomes. The deal underscores Microsoft's commitment to becoming a key player in the ad tech industry.

What Is Xandr?

Founded in 2018, Xandr offers a suite of advertising solutions, including a demand-side platform (DSP) and a supply-side platform (SSP). Its core products focus on data-driven performance and video advertising, providing unique features like exclusive audience access and custom bidding algorithms. Xandr differentiates itself with an end-to-end platform that ensures efficiency and stability, as well as future-proof identity solutions and robust video and connected TV (CTV) capabilities.

Who Acquired Xandr?

Microsoft is a leading technology company known for its extensive range of products and services, including software, cloud computing, AI, productivity tools, gaming, and applications. Key offerings include Microsoft 365, Teams, Copilot, Windows, Xbox, OneDrive, Azure, and Visual Studio. The company holds a dominant position in the industry, influencing sectors such as cloud computing, AI, and gaming with its innovative solutions and comprehensive product offerings for both consumers and businesses.

When Was Xandr Acquired?

Microsoft completed its acquisition of Xandr on June 6, 2022. This acquisition came at a pivotal time in the digital advertising industry, marked by a shift towards first-party data and privacy-centric solutions. The deal, initially announced on December 21, 2021, aligns with broader industry trends where companies are moving away from third-party ad tech. By integrating Xandr's technology, Microsoft aims to enhance its digital advertising capabilities while respecting consumer privacy preferences.

Why Was Xandr Acquired?

• Market Expansion: The acquisition of Xandr allows Microsoft to broaden its reach in the digital advertising and retail media markets. By integrating Xandr's platform, Microsoft can offer additional inventory such as native video and digital TV, thereby enhancing its market presence and reaching a wider audience.
• Technology Integration: Microsoft benefits significantly from Xandr's advanced technology. The integration involves combining Microsoft's audience intelligence and technology with Xandr’s data-driven platforms, such as Xandr Invest for cross-screen buying and Xandr Monetize for improved monetization and video solutions. This merger accelerates the delivery of digital advertising solutions and enhances Microsoft's capabilities in respecting consumer privacy and understanding publisher-consumer relationships.
• Competitive Advantage: The acquisition strengthens Microsoft's position against competitors like Google and Facebook. By leveraging Xandr's technology, Microsoft can offer new products, targeting options, and opportunities that attract advertisers looking for alternatives. The focus on consumer privacy and data governance further bolsters Microsoft's competitive edge in the digital advertising space.

Acquisition Terms

• Acquisition Price: The acquisition price was not publicly disclosed.
• Payment Method: The payment method used in the transaction was not specified.
• Key Conditions or Agreements:
  • The transaction is subject to customary closing conditions, including regulatory review.
  • The acquisition does not include the advertising sales business supporting DirecTV.
  • Microsoft and Xandr share a vision to empower the open web while respecting consumer privacy preferences.
  • Microsoft has enlisted outside consultants to advise on the integration of Xandr.

Impact on Xandr

The acquisition of Xandr by Microsoft has led to significant changes in its operations and management. Key senior departures, including CEO Brian O’Kelley and Brian Lesser, marked a shift in leadership. The Xandr team is now integrated with other Microsoft services like PromoteIQ, Teams, Outlook, Bing, and Xbox. This reorganization aims to streamline operations and enhance Microsoft's first-party advertising capabilities. Layoffs and increased demands on the Xandr group have created a period of transition and uncertainty for employees, but the integration is expected to bring long-term benefits.

In terms of product offerings, the acquisition has bolstered Microsoft's digital advertising solutions. Platforms like Xandr Invest and Xandr Monetize are now part of a broader suite that includes the Microsoft Audience Network and PromoteIQ. This integration enhances Microsoft's ability to offer native video, digital TV, and retail media solutions. While there are no immediate changes to how businesses are supported, the long-term outlook suggests improved services for advertisers and publishers. For founders considering business transitions, tools like Sunset can assist in managing these processes compliantly, ensuring a smooth and efficient transition.