Optus and parent company Singtel will make a major push into the mobile advertising market following a company-wide restructure and $US321 acquisition of mobile marketing company Amobee.
According to Allen Lew, Group Digital L!fe CEO and acting head of Singtel’s Group ICT unit, the acquisition of mobile advertising company Amobee for $US321 — announced at the same time as the new business structure — would allow Singtel to become a “significant mobile marketing entity”.
“We believe that the market for mobile marketing is poised for a revolution,” he said. “In recent years online advertising has exceeded $US25 billion world-wide revenue. The next frontier of digital advertising is really in mobile.”
Lew said the foundation for this belief was the high penetration and use of mobiles in the Asian regional in particular combined with the depth of customer data telecommunications companies were able to provide would-be advertisers.
“Because the telecommunications industry generates rich customer relationship management information ranging from basic age, gender, social-economic status and some other data such as handset models and location – all gathered with the customer’s permission – we will have a wealth of information that allows the targeting of the mobile and can deliver the results the advertisers want,” he said.
“Also, the mobile phone is personal so advertisers can know exactly where and when and how customers are looking at ads, so advertisers are able to have a highly targeted message to each individual.”
Citing Gartner data, Lew said global mobile advertising revenues as at 2011 were worth $US1.3 billion. By 2015 this was expected to grow to $US20.6 billion by 2015 – overwhelmingly fuelled by the Asia Pacific and Japan.
Optus was already fairly advanced in its rollout of mobile advertising, Lew said, as well as being aware of the customer privacy issues tied to mobile advertising.
“In Australia we running a trial right now for a small number of customer to see what sort of interactions they will participate in and what information they are comfortable in disclosing to us,” he said. “That will help us build up the base we need across Australia and Singapore the data we need to make sure that mobile advertising achieves its full potential.
“We are very cognisant of the fact that customers value their privacy and certainly information will be collected based on their full knowledge and full permission.” Lew said that for wider deployment of mobile advertising permission to collect data and push personalised ads would be sought from users at the handset level. The request would be positioned as an opportunity for the user to have more “beneficial offers” pushed to them.
ICT play
Commenting on Singtel’s play in the ICT space, Lew said the ability for it to organise its ICT services at a global level was a major driver for the creation of the new management structure.
“What we are seeing is two major trends among our enterprise customers,” he said. “Enterprise decisions – at least for multinationals – are being made on a regional basis and or even global basis, so the ability for us to pool our customers and manage them as a single entity with multiple geographies becomes very important.
“The second important thing is the emergence of CIOs in MNCs (multinational corporations) purchasing all ICT services from a single provider and increasingly getting telcos to play beyond just providing data and carriage services.
“That is an opportunity to take the skills we have in Australia with [integration business] Alphawest and Optus Business with what we have in the region with NCS and create a single delivery and more targeted sales organisation.”
Lew added that the new structure would also allow Singtel to examine the costs associated with its ICT products and services and bring these down through using the greater purchasing power of its combined enterprise teams.
“Cost in the telecommunications industry is a major competitive edge, and economies of scale lead to those cost savings, so that is a third area the ICT team will be focusing on with this new structure,” he said.