619: Finding Finance’s Center of Gravity | Ray Carpenter, CFO, Xandr

Listen to the Episode Below (00:45:39)

When Ray Carpenter retraces his steps to the CFO office at Xandr—an analytics and advertising company formed by AT&T’s WarnerMedia—he singles out two earlier roles as having been outside AT&T’s traditional finance track.

“I actually got kicked out of finance for that role,” says Carpenter, referring to a stint as a marketer inside a start-up launched by AT&T’s emerging business markets group. “We did things that were uniquely different from what AT&T typically does when it launches a new business,” continues Carpenter, who in addition to marketing was responsible for the start-up’s pricing strategy.   

Next, Carpenter joined AT&T’s mergers integration group, where he helped to lead integration planning efforts for different corporate functions, a role that made him keenly aware of the integration challenges such future acquisitions as DirectTV would present.

From his stint in the mergers group, Carpenter stepped back inside AT&T’s more traditional finance and accounting ranks and was soon named CFO of its Entertainment and Internet Services division.

“It wasn’t a forgone conclusion and still never is. AT&T has a habit of moving people around,” explains Carpenter, who mentions a number of different functional areas recently led by executives who in the past had held traditional finance roles.

Says Carpenter: “I always knew that I’d be close to numbers, data, and analytics, and I felt that this would typically put me in the finance camp, but I wasn’t surprised when other opportunities surfaced.” –Jack Sweeney

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Guest: Ray Carpenter

Company: Xandr

Connect: www.xandr.com

Headquarters: New York, NY

When opportunities first surface…

CFOTL: Help us to better understand how finance is playing a strategic role for Xandr and how these business opportunities that Xandr is now pursuing have taken shape …

Carpenter: Here’s a good way to think about it. The center of gravity, financially, for our business is driven by how we monetize advertising inventory that is associated with our DirectTV and video businesses. So when you’re sitting and watching television, typically you’re going to get 16 minutes of ads for every hour of programming. Well, the way this industry works is that programmers—so, think of any cable programmer—will ink an agreement with a distributor, like DirectTV, that says that the distributor can monetize 2 minutes of those 16 minutes however they see fit to help to compensate them for distributing the content.

What we’ve done at AT&T through Xandr is to take those 2 minutes and use the data that we have about our customers and the technology that we’ve built in partnership with a company called INVIDI to actually ensure that when you’re watching your television and your program and I’m watching the exact same program but in a different household, you and I will see different ads, even though we’re experiencing what would be considered a linear video experience. This is called “adjustable advertising.” We lead in this area across linear TV providers, and it’s been a great source of growth and advancement for the overall industry that is all part of Xandr. And there’s a lot of technology and data behind making that happen.

As we built Xandr, though, in addition to this—and knowing that things are moving to a more digital format and more and more video is being consumed across software-driven platforms—we bought a firm called AppNexus, which was one of the leading independent digital advertising marketplace companies. We’re now investing in how we stitch together that premium linear video capability to deliver targeted ads along with premium digital video experiences and targeted ads, and then other formats in between, like display as well. You take all of this capability, and these are our offerings. We can give you a marketplace where publishers and brands can come together and connect in a way that’s more efficient and data-driven. And we can sell brands an ability to be more targeted in a more traditional linear video format.

Now we bring in WarnerMedia, where we have this rich library of content and premium video and other digital assets and where we can take this same marketplace capability and empower this inventory in a way that is going to get more yield and be more profitable for the publishing side of our business. jb