SingTel has made another two major investments in the digital space through its mobile ad firm Amobee – acquiring Adconion Direct North America and Adconion Australia, along with Kontera Technologies. Adconion was acquired for US$235 million, while Kontera was bought for about US$150 million.
Adconion offers ad solutions across mobile, web and social networks, while Kontera is a digital content intelligence company with offices in the US, UK and Israel, allowing users to analyse content across mobile, web and social networks.
In 2012, SingTel bought mobile ad company Amobee for a reported US$321 million; last year it bought Gradient X, another mobile ad tech start-up.
With these acquisitions, as well as the US$30 million Amobee spent last year, already a quarter of the SG$2 billion set aside two years ago for SingTel’s three-year plan to ramp up digital advertising has been used up, revealed Allen Lew, CEO of Group Digital L!fe and chairman of Amobee.
This investment comes despite Amobee still running at a loss, he added. However, SingTel has planned a three to five year timeline to get the company contributing to its bottom-line revenue.
He said he viewed Amobee’s contribution to SingTel as being more than mere cash and profitability because valuation in the digital space is “different from traditional telcos. So when you look at its contribution to SingTel, there are two parts – profit and valuation”, he said.
“The digital advertising business is about scale and capitalising on the market opportunities with technology as a core differentiator.”
He said these acquisitions would mean big opportunities for SingTel in emerging markets, such as India, Indonesia, Thailand and the Philippines.
“As more people in emerging markets get smartphones and the cost of smartphones decrease, even Amobee will start to get more share-of-voice from advertisers. Companies want to get into the face of consumers in a personalised way, in a way perhaps the fixed internet and traditional media has not quite been able to,” he said.
Currently, Amobee holds a 10% share of the ad spend in the display advertising market.
Mark Strecker, CEO of Amobee, also added that as more and more global clients look to Asia, the move was needed to strengthen Amobee’s position in the market.
“People have this perception telcos shoot and pray it sticks _ we want people to know that at SingTel we look at businesses in a systematic way. Rather than shooting at a large number of targets we shoot at a few major businesses,” Lew said.