Home Mobile Why SingTel Sings For Ad Tech

Why SingTel Sings For Ad Tech

SHARE:

singtel partsSingapore Telecommunications’ intent to acquire cross-channel ad platform Adconion (at a $235 million valuation) and ad network Kontera (at a $150 million valuation), on behalf of its mobile ad solutions subsidiary Amobee, is yet another example of a telco diving deeper into ad tech.

SingTel’s announcement arrives less than a month after news broke of Verizon’s identifying mechanism, PrecisionID.

While neither SingTel nor Verizon will likely become tech vendors (their respective telco businesses dwarf their ad tech businesses), these moves reflect an attempt to expand their lines of business and to be more than just messaging pipes.

“SingTel doesn’t want to be a legacy telco and be left out of the action,” said R “Ray” Wang, principal analyst and CEO at Constellation Research. Telcos, he said, have extremely valuable consumer data and can deliver context in the form of location, identity and relationships. For Wang, SingTel’s two consecutive purchases demonstrate that the telco is scrambling.

“Most telcos have missed the boat on the opportunities for ad tech,” he said. “Now they’re looking at the future.”

Allen Lew, Amobee chairman and CEO of SingTel’s digital services arm, Group Digital Life, emphasized the telco’s reach in the press release: “The SingTel Group has significant scale and customer relationships with over 500 million mobile customers, as well as intelligent networks, billing capabilities and extensive touch points.”

But industry watchers speaking off the record wondered if SingTel had overpaid for the two companies. Both Kontera and Adconion were having difficulties, one source claimed, because both had haphazardly accumulated capabilities in an effort to get funding, each essentially biting off more than it could chew.

But overpayment likely doesn’t matter to a company with pockets as deep as SingTel. For a telco, $385 million really isn’t that much to spend (consider that Sprint hopes to buy T-Mobile for $32 billion). Once the acquisitions finalize, SingTel will own a pile of advertising technology it didn’t have before, it will have the option to strengthen a non-core line of business (ad tech) and it will increase its penetration in the United States.

Recall that when SingTel acquired Amobee two years ago for $321 million, it gave the Singaporean company a foothold in the US market, one that is strengthened by Adconion (which also has an Australian group) and Kontera.

SingTel’s Amobee certainly wouldn’t be the first ad tech company betting it can take its Frankenstack, unify it and productize it. The upshot for SingTel is it’ll be able to cultivate a very valuable asset: rich consumer data.

Subscribe

AdExchanger Daily

Get our editors’ roundup delivered to your inbox every weekday.

But as one source pointed out, this is a dangerous game for telcos to play. While telcos might have deep data assets they regularly tap for their own internal purposes, activating it for clients could run them afoul of privacy laws and sour consumer sentiment even more.

It’s possible that SingTel can get around that since it pledged to let Amobee run as an independent unit. But it’s clear SingTel hopes to benefit from synergies between its digital ad business and its core telco business. As Lew said in the press release, “Together with Amobee’s advanced digital marketing technology and solutions, we will create relevant and innovative marketing campaigns across multiple channels for brands and advertisers.”

Amobee CEO Mark Strecker was unavailable for comment as of press time.

Must Read

Comic: Gamechanger (Google lost the DOJ's search antitrust case)

DOJ v. Google: How Judge Brinkema Seems To Be Thinking After Week One

Where the DOJ v. Google ad tech antitrust trial stands after one week’s worth of remedies arguments.

Swish, A Company That's Bringing Programmatic to Product Sampling, Announces Seed Funding

Swish, a startup that partners with retailers to provide product full-size CPG samples to people doing their grocery shopping online, announces $2.3 million in seed funding.

DOJ v. Google: During Opening Arguments, The DOJ And Google Battle Over An AdX Divestiture

Court is back in session. And the fate of  the open internet is in the balance.

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters
Chris Mufarrige, director, Bureau of Consumer Protection, FTC

FTC Consumer Protection Chief: No Easy Answers On Privacy, ‘Only Trade-Offs’

Privacy isn’t black-and-white, says the FTC’s Chris Mufarrige, promising evidence-driven consumer protection cases under the Trump administration.

How Encryption Keys Could Resolve The TID Furor

Rather than sharing universal TIDs that any DSP or curator can access, Raptive says publishers should instead share encrypted TIDs with an encryption key provided only to trusted demand-side partners.

Clear Channel Brings Mid-Flight Measurement To Its OOH Network

Clear Channel will provide advertisers weekly, mid-flight reports on outcomes driven by its inventory in order to bring OOH measurement closer to the speed of digital.