Network Effect: SingTel-Owned Amobee Expands Mobile Ad Platform To Cover Its Globe, Optus And Telkomsel Holdings

When the pan-Asian mobile carrier SingTel paid $321 million to acquire mobile ad platform SingTel in May last year, the thinking was that the Singapore-based SingTel could use Amobee to serve targeted ads to its 480-million mobile subscriber base across the region. Some eight months after the deal has closed, that network effect is coming into play: today Amobee is announcing that it will take over all mobile ads for SingTel, as well as Globe in the Philippines, Optus in Australia and New Zealand and Telkomsel in Indonesia.

The deal is exclusive and will mean that all four carriers will be served ads through Amobee’s PULSE mobile ad platform — which was initially developed by Amobee in California but has since been integrated into SingTel’s servers in the Asia-Pacific region. Initially, this deal will cover 200 million users, Amobee says, but will be extended out to eventually cover all of SingTel’s 480 million subscribers. Overall, SingTel is active in 20 countries.

Amobee continues to work with other carriers that are not part of the SingTel group. These include AT&T and Sprint in the U.S., Vodafone and Telefonica, as well as others across Europe and the Middle East. But the Asia-Pacific portion of its business is now growing. Whereas last year it made up 10 percent of Amobee’s revenues, this year that rose to at least one-third.

The idea is for SingTel to gain better control over ads across its network of operations, and offer publishers a more attractive, targeted advertising option than going with one of the other established players — such as Google, the king of the mobile advertising hill.

“Instead of competing against Google, it’s about doing something different,” noted Mark Strecker, COO for Amobee, in an interview with TechCrunch. “A lot of carriers are looking for alternatives to Google.”

That strategy, of course, will take on a new twist for SingTel in the coming years. SingTel is one of the 18 carriers that has signed on to work with Mozilla in the development of the Firefox OS for mobile (and the two partner on investments to boost that ecosystem, too, such as this $25 million investment in mobile search startup

One of the promises of the new HTML5-friendly platform is that it will give carriers a bigger say in how mobile services are localized for their respective customer bases. That will include what ads get delivered, and by whom. Those handsets will start to appear in different markets later this year.

These developments are not coming straight away, but they are coming. “What I can say about Firefox OS is that carriers are looking for ways for a more integrated experience. Having something on the handset for an integrated experience is more compelling to the user, and enabling advertising for the OS will be something that is a more integrated experience,” said Strecker. “That is definitely a theme. The specifics of how and when that is getting rolled out and in terms of integration from a carrier standpoint have yet to be rolled out.”

PULSE is an example of how the “big data” concept is being applied in the world of mobile advertising: sourcing data like user location and browsing history straight from the carriers, it then serves back ads that are more targeted and relevant, sourcing not just from Google but some 80 other ad networks. The promise to publishers is that this potentially gives them much better economies of scale, as well as more relevant audiences for their brands. Advertisers that have worked with Amobee include Google, Skype, eBay, Barnes & Noble and Nokia.

Interestingly, although SingTel is clearly subsuming and using its new mobile company to flex its muscle in the region, Amobee itself is run as an independent business.

“We’re still run as a separate entity within SingTel. You could say we have continued operating as a startup, just with one investor now instead of several,” Strecker said. (VCs that had backed Amobee prior to acquisition included Accel, Sequoia, Globespan, Vodafone, Cisco, Motorola, Telefonica and Amdocs.) “One of the opportunities for them buying us was about leveraging data and making context more relevant in mobile ads.”

Mobile advertising is growing worldwide with the rise of smartphones, mobile broadband networks and a subsequent rise in usage of apps and mobile web — revenues in 2012 from mobile ads reached $2.6 billion in 2012. But its role in regions like Asia-Pacific is especially a focus for the industry because in emerging markets, handsets become the primary device for accessing the Internet, instead of more traditional, larger-screened computers. SingTel buying Amobee was a strategy for the company to gain more control over that growing revenue stream.

“The Philippines is one of the fastest growing, mobile-centric markets in the world, where nearly every Filipino owns a mobile device rather than a computer,” Ernest Cu, CEO of Globe, noted in a release announcing the news. “Therefore, it has become crucial that advertisers and brands stay on top of consumers’ minds with relevant mobile ads.”