Carrier Evolution

The typical professional working in the telecom business can be forgiven for not knowing mobile advertising platform Amobee, any more than the typical professional knows all that much about the details of all the other myriad of activities routinely conducted by tier-one mobile service providers globally.

But Amobee now is among the best examples of how tier-one service providers can grow a big new business in mobile advertising. First, as often is the case, where service providers worry about becoming a “dumb pipe,” Amobee’s approach to its platform is laden with “value.”

The simple argument anyone could make about how mobile service providers can be serious players in mobile advertising is to own an ad network, offering brands the inventory represented by all those mobile devices. Mobile service providers of course have to work with other service providers “out of region” to amass screens and inventory. But that is something virtually every service provider in telecom is used to doing, at some level. No carrier ever originates and terminates entirely on its own facilities. A big mobile advertising platform has to do aggregate inventory from many mobile network operators to gain scale.

Amobee’s strategy can be likened to the difference between a data center and a cloud services provider. Running a hosting center, or a network of hosting centers, is a simple real estate play. Amobee, by analogy, is a cloud “platform as a service” provider. The difference is the level of value-added service and the range of problems each solution provides.

Ad networks aggregate inventory (“ad avails”) and sell that inventory to advertisers. That is the analogy to data hosting. Amobee aggregates inventory, to be sure. But its real pitch is the creative services it offers. The difference is between a Madison Avenue ad agency, whose business is creating the ads, and only later placing those ads, and the TV, radio or print publisher that has the right inventory.

Mobile ad networks are like Comcast or the Wall Street Journal. Amobee is more like the agency a brand hires to develop the concepts and execute the messages in physical form, and only then placing the messages in the right media.

Second, Amobee is owned by Singtel, which operates in some 20 countries throughout Asia and serves 434 million mobile customers and has investments in Bharti Airtel (India), Telkomsel (Indonesia), Globe Telecom (the Philippines), Advanced Info Service (Thailand), Warid Telecom (Pakistan) and PBTL (Bangladesh). Amobee also has aggregated inventory on Vodafone and Telefonica networks as well, amassing a multi-continent network of about one billion people.

Third, Amobee’s client roster already includes the big brands a tier-one supplier must garner to create a sizable business. Nokia, BMW, AOL, eBay, Zynga, Skype, Google and Barnes & Noble are some of Amobee’s existing clients.

In other words, Amobee is carrier friendly, built to scale, emphasizes the value add and already has shown traction with some of the biggest names in advertising.

In the latest news, Amobee has acquired a 3D specialist operation known as Adjitsu, a feature Admobee CEO Trevor Healy believes will provide an edge in a young mobile ad business that nevertheless, from a creative point of view, “can be quite static and pedestrian.”

The other very-practical angle is that one thing a brand does not want is a viewer immersed in a 3D program to suddenly find themselves watching either a high-definition or standard-definition video ad, if video is the ad format the advertiser prefers.

The main point, though, is that Amobee provides a good example of what it takes for a mobile service provider to succeed, big, in mobile advertising.