• Wall Street Journal, Wednesday, October 26, 2016 6:42 AM

The proposed $85 billion merger between AT&T and Time Warner continues to reverberate in adland. The companies, combined, spent $2.91 billion in paid advertising in 2015. What will happen if they merge? Where does all that money go? "Both companies are among the top 10 advertising spenders in the U.S., and AT&T has already said it would look for $1 billion of cost savings over three years," a report in the Wall Street Journal states. "Last year, AT&T spent $1.84 billion on U.S. paid media — including display advertising, but not mobile, social or online video — and was ranked the second-highest U.S. ad spender by Kantar Media. Time Warner spent $1.07 billion and was ranked No. 9. The combined figure of $2.91 billion would have ranked as the top spender in 2015." In fact, the Journal points out that both companies "have already spent less on paid media from January to June this year, compared with the same period in 2015, according to data from Kantar Media. And the wireless and media giants’ consolidated ad spending figures would likely shrink even more if the deal gets approved." 

But does that mean that a combined company will continue to spend on advertising?  John Stephens, AT&T's financial chief, stated on a conference call with investors: "When you think about our synergies on a combined basis, we’ll be a company that spends close to $6 billion on advertising." That's total advertising, not only paid media in the U.S.

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