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Opera Mediaworks buys AdColony as mobile video quickly heats up

AdColony

An AdColony ad for Sony Pictures' Hotel Transylvania

In the latest sign that a race is on among mobile advertising platforms to gain ground in mobile video, Opera Mediaworks has acquired AdColony for $75 million in cash plus potential earn-out payments of up to $275 million.

 As video consumption continues to grow on mobile, leading brands such as Bud Light, L’Oreal and Oreo increasingly funneling big bucks into mobile video. The deal positions Opera Mediaworks for a role in this quickly market at the same time that Ninth Dimension and others are also jockeying for a leading position.

"Opera has clearly been making a concerted effort to better monetize the many billions of mobile impressions it services monthly via its estimated 300 million unique monthly users,” said Shuli Lowy, marketing director at Ping Mobile. 

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"Opera’s series of acquisitions are likely to make waves in mobile banner and video ads but not in search-based advertising,” she said. "While Opera does service a large amount of paid mobile search, the browser uses Google for its search engine. 

 "Over the past 2 years mobile video has made tremendous strides in reducing the load time. This has been a game changer for mobile video ads. Ad Colony has really focused on creating a fast video load time."

Impressive growth
This is not the first mobile ad related acquisition for Opera. In 2012 it acquired Mobile Theory and 4th Screen and in 2010 it acquired Ad Marvel. 

Mobile video consumption is growing quickly. A recent report from Ooyala found that mobile video watching has grown 532 percent in two years, with mobile and tablets now representing over 21 percent of all online video plays.

At the same time, mobile video advertising is experiencing the fastest growth rate in terms of spend for mobile advertising and all of digital advertising.

Marketers in the United States are expected to plunk down almost $2.1 billion on mobile video advertising in 2016, up from $518 million in 2013, according to a recent data from eMarketer.

AdColony is one of the leading players within this space. The company delivers full-screen video ads in HD across a network of iOS and Android apps. Its clients include leading brand marketers and publishers.

The company focuses on reaching mobile users inside apps when they are engaged in some kind of entertainment related activity, including viewing content, playing a game or listening to music. AdColony asserts that mobile users are more receptive to ads during such moments as opposed to when they are searching on the Web and have an immediate need. 

“Today is new chapter for Opera Mediaworks where we combine forces with the world's best mobile video ad platform,” said Mahi de Silva, CEO of Opera Mediaworks. “Mobile video is the fastest growing medium on mobile devices and the most sought after ad unit by advertisers today.  

“Our platform is now even better positioned to deliver what our customers want and need,” he said.

“We aim to be the go-to-platform for mobile advertising - for publishers and advertisers.  In a rapidly consolidating market, we are a consolidator - bringing the best teams in mobile advertising together, under one brand - on a single platform.”

Multiple solutions, one brand

Opera Mediaworks, a division of Opera Software, operates a mobile ad network for brands and delivers ad server and monetization tools to media companies.

Opera Software is pushing for a bigger role in the mobile ecosystem. Yesterday, the company also announced that Opera is the default browser for Nokia X family of devices.

On the advertising front, the bigger strategy is to consolidate multiple leading mobile advertising solutions under one brand.

With the AdColony deal, Opera claims it will be able to reach more than 700 million consumers globally and becomes the world’s leading mobile video ad platform.

With the deal, Opera Mediaworks now offers a range of mobile ad solutions, including creative, targeting, analytics, measurement, programmatic buying and rich-media offerings in addition to video. 

Land grab  
The deal is the latest example of how companies with a vested interest in mobile advertising are looking for ways to take advantage of the skyrocketing growth in mobile video.

Recently, Ninth Decimal, previously JiWire, partnered with mobile video company TubeMogul to better target these ads. The new solution is already being tested by Old Navy, L’Oreal and Kraft (see story). 

Brands are embracing mobile video for its ability to tell a story as the understanding deepens around what works in reaching mobile users. In particular, savvy marketers are looking to reach beyond the standard banner ad, which has a place on desktop but may not be best way to engage mobile users on what is very personal device. 

The Opera Mediaworks AdColony deal is expected to close in the third quarter of 2014.

Will Kassoy will continue to lead AdColony as CEO, and he will additionally take on the role of chief marketing officer of Opera.

 “At Opera, we've assembled the most comprehensive mobile advertising platform that serves both advertisers and publishers,” Mr. de Silva said. “We've achieved a lot, from the first rich media ads in the Wall Street Journal and USA today iPad apps in 2011 to ad units that incorporate the camera, accelerometer and microphone on smartphones.”

Final Take
Chantal Tode is senior editor on Mobile Marketer, New York

Associate Editor Chantal Tode covers advertising, messaging, legal/privacy and database/CRM. Reach her at chantal@mobilemarketer.com.

 
Related content: Video, Opera Mediaworks, AdColony, mobile video, mobile advertising, Mahi de Silva, mobile marketing, mobile

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