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  • “The world needs advertising more than ever. We just need to make it more relevant,” says AT&T Advertising and Analytics CEO Brian Lesser.
  • “Subscription video on demand is a great service” but won’t be able to fund “all the content that’s being produced,” Lesser says.
  • He dodges questions about a Wall Street Journal report that AT&T is in talks to buy ad tech firm AppNexus.
AT&T’s Brian Lesser on the future of advertising  

AT&T’s Brian Lesser on the future of advertising from CNBC.

The newly combined AT&T-Time Warner is looking to reinvent advertising — but to do so, it needs to buy more technology, AT&T Advertising and Analytics CEO Brian Lesser told CNBC on Wednesday.

Lesser, who spoke on “Squawk Box” from the Cannes Lions advertising and marketing festival in France, dodged questions about a Wall Street Journal report that AT&T is in talks to buy ad tech firm AppNexus in what could be a $1.6 billion deal.

AppNexus is backed by WPP, where Lesser used to work as CEO of the ad giant’s GroupM media unit. Lesser is also a former AppNexus board member.

“There’s lots of rumors that come up at Cannes,” said Lesser, though he did say “we need more tech” in order to build AT&T’s $2 billion ad business “into something more significant.”

Lesser echoed what AT&T Chairman and CEO Randall Stephenson told CNBC on Friday, a day after closing the $85.4 billion Time Warner acquisition. Stephenson said the company expects in coming weeks to make smaller acquisitions to enable its ad platform goals.

“The world needs advertising more than ever. We just need to make it more relevant and make matter for consumers,” Lesser said. “Everybody still hates advertising when it interrupts the content. It’s our job to reduce the load on consumers, make it a better experience.”

Lesser described technology that AT&T has to keep viewers more engaged. “Imagine you’re watching content [on TV] and instead of interrupting … with a traditional commercial break we can show an icon on the screen that indicates to you that there might be a mixed-reality experience [on mobile] where you can get more information about the car you just saw or the dress you just saw.”

Taking ads completely out of the picture with a Netflix-type paid subscription model is not sustainable, Lesser said. “Subscription video on demand is a great service and consumers love it. But you can’t possibly pay for all the content that’s being produced now through a subscription.”

Hulu offers a hybrid paid model, one subscription tier that’s completely ad-free and a less expensive tier with “limited commercials.”

Amazon, the other streaming juggernaut, offers its video and music services free to subscribers of Prime, which includes free, faster deliveries for purchases on the e-commerce side.

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Sourced from CNBC