SingTel acquires Amobee in a push to become a mobile advertising leader
By Chantal Tode
March 6, 2012
Singapore Telecommunications Ltd. has signed an agreement to acquire U.S.-based mobile advertising solutions provider Amobee for $321 million as it looks to increase its share of the digital consumer wallet and to shape the digital ecosystem.
The deal will give SingTel a way to expand its presence into the fast-growing mobile advertising and marketing industry at a time when most carriers are facing declining revenues from voice. SingTel said its goal is to become the leading mobile advertising company in Asia Pacific and among the top three companies worldwide.
With declining revenues from voice, wireless carriers are looking for additional revenue streams, said Michael Collins, CEO at Joule, New York. Further pursing the revenue opportunity from mobile advertising is a logical extension for Singtel, as it has been for many other wireless carriers around the world.
Mobile carriers control a huge amount of audience data that can be extremely valuable for targeting mobile advertising, he said. If Amobee gives Singtel can better means to exploit this data, the combination of these two companies could create a powerful offering.
The new opportunities opened up for brands by this deal will be within Singtels subscriber base, where they have significant audience data to be leveraged for better targeted advertising.
SingTel wants to help brands better reach their target audience and deliver relevant offers, rewards and promotions to customers that can help them deepen their one-on-one engagement with different audiences across different countries.
The deal with will help SingTel enhance its existing strengths in mobile, which include geo-localization capabilities, over 400 million mobile customers in emerging markets and capabilities that enable customers to receive relevant and customized offers.
Amobee, which provides mobile advertising solutions to operators, publishers and advertisers globally, complements SingTels capabilities with a technical platform that serves ads, banner as well as video ads. Redwood City, CA-based Amobees clients include eBay, Nokia and Barnes & Noble.
Additionally, Amobee brings to the deal an experienced team in mobile advertising. SingTel said Amobees management team will remain in active control of the company.
With mobile customers in 25 countries, including Bangladesh, India, Indonesia, Pakistan, the Philippines and Thailand, the move into mobile advertising by SingTel could give advertisers an important way to reach consumers in these markets.
The Asia-Pacific region has been one of the most influential markets for the development and adoption of smart devices and it is now a big growth market for mobile advertising, said Mihael Mikek, CEO and founder of Celtra, Cambridge, MA. Marketers are looking for global reach and they will want to target consumers with mobile ads in Asia-Pacific.
While wireless carriers are primary sources of information about mobile consumers, for much of mobile advertising carriers are a transmission tool and not included in the transaction.
However, given the personal nature of mobile devices, which users carry around with them everywhere, carriers could be better suited to target a consumer with a specific ad.
For example, SingTel might be able to offer customers an ad-subsidized service plan.
Carriers could also consider an advertising model similar to the prepaid model enabling consumers to choose to watch an ad and receive a perk or benefit as soon as they finish.
While SingTel says it has its sights on becoming one of the top three mobile advertising companies worldwide, extending advertising beyond its subscribers could be a challenge.
Extending the Amobee offering outside SingTels subscriber base could prove difficult for SingTel as they will lose their competitive advantage, which they get through their subscriber data, and would be up against other strong players, like the portals, networks and other carriers, Joules Mr. Collins said.
Chantal Tode is associate editor on Mobile Marketer, New York
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