AT&T Inc. T -0.42% executives say their proposed $85.4 billion acquisition of Time Warner Inc. would deliver innovation to advertising.

While ad industry executives love hearing such talk, they say it is unclear exactly what it could mean for them.

The combination of AT&T and Time Warner would bring together huge amounts of viewer data with content, which could serve as a catalyst to make TV advertising a lot more targeted to individuals, similar to the way digital advertising is now.

In addition, AT&T’s data from its 90 million wireless subscribers and DirecTV households could be leveraged to target people with ads across devices, including TVs, laptops and mobile phones, some ad executives speculate.

Related Videos AT&T reached a deal to acquire Time Warner for $85.4 billion in cash and stock, a move which creates a media giant. Photo: Richard b. Levine/Newscom/Zuma Press

WSJ's Keach Hagey takes a look at the political and regulatory hurdles facing the proposed AT&T-Time Warner merger, as well as the merger's potential impact on consumers, on Lunch Break with Tanya Rivero. Photo: Reuters

Both approaches are potentially powerful for marketers but not without hurdles, including privacy concerns.

Yet cable and satellite TV operators have long promised marketers would be able to target TV commercials to individual homes. Such addressable, or targeted, advertising uses set-top boxes to route commercials to specific households or neighborhoods based on data about income, ethnicity, gender or other characteristics. For example, families with children could be shown minivan TV ads while a single person in the same town could be shown a TV spot for a sports car.

“Addressable advertising has been two or three years away for at least 10 years,” said analyst Craig Moffett at MoffettNathanson.

The tactic historically has been very manual to implement and patchwork, limited to small pools of ad space in specific areas of the country.

“It has been at the kids’ table,” said Tim Hanlon, a former ad-agency executive and founder and chief executive of Vertere Group, which consults with ad and media companies. “It has been very difficult to scale in a sizable way.”

AT&T CEO Executive Randall Stephenson said the merger with Time Warner could change that, highlighting addressable TV ads as a key opportunity. “When you combine Time Warner’s content with our scale and distribution...[and] put that with our customer insights and the addressable advertising opportunities that flow from that, we think we build something here that’s really special,” Mr. Stephenson told investors on Monday.

Currently, companies like AT&T are limited to running addressable TV ads within the two minutes an hour of local commercial time in cable programming sold by the pay-TV provider.

If the proposed deal goes through, AT&T could expand this to all of the ad space on Turner networks like CNN—albeit only in the AT&T households with the capability.

It would give “addressable TV a significant increase in inventory that advertisers can now buy,” said Tracey Scheppach, an executive vice president at Publicis Media, an ad-buying firm owned by Publicis Groupe.

If that happens, ad executives said the deal could encourage other cable giants to make addressable TV advertising more of a priority.

The dream is that addressable TV ads become more national in nature, making them attractive to more advertisers.

However, that is a big if. Major broadcast and cable networks control their own national ad sales and have been inclined to sell expensive ads designed to reach large swaths of the country.

Brian Wieser, a senior research analyst at Pivotal Research Group, said he remains skeptical about addressable advertising.

“Turner’s advertisers generally need to buy their video/TV ads cost-effectively, and need units that reach all parts of the country, not only those who are AT&T subscribers,” he wrote in a note. “This means that enhanced ad units that AT&T may offer when ads are delivered on its platform are of limited use if those enhanced ad units are not available through other distributors.”

Although addressable TV advertising is growing rapidly—and projected to more than double this year—it is still a small piece of the overall TV ad business. Advertisers are expected to spend almost $1 billion, about 1.3% of TV ad spending, on addressable TV ads in the U.S. this year, according to eMarketer.

A more national addressable TV ad footprint could be kick-started by DirecTV’s direct-to-consumer streaming offering that is launching later this year, as well as other services aimed at cord-cutters. Unlike the traditional pay-TV landscape, where addressable TV ads are funneled through set-top boxes, TV delivered over the internet allows for more weblike ad delivery that isn’t limited by region.

The other big potential advertising synergy to exploit is the use of data to target consumers across screens, which would help the company to more directly compete with Facebook and Google.

“Targeting people from device to device is one of the most vexing challenges in the marketing ecosystem today, and this alignment would be a meaningful step in that direction,” said David Cohen, president of North America for ad-buying firm Magna Global.

Write to Mike Shields at mike.shields@wsj.com and Suzanne Vranica at suzanne.vranica@wsj.com