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    Jun 12, 2014

    SingTel buys ad tech firms in digital push

    SINGTEL announced yesterday that it is buying two advertising technology firms for a total of US$359 million (S$448.6 million) as it works to strengthen its foothold in the digital marketing sphere.

    Amobee - a wholly owned subsidiary of SingTel - will acquire Adconion, comprising of Adconion Direct North America and Adconion Australia, for US$209 million, and Kontera Technologies for US$150 million.

    Operating primarily in the United States and Australia, Adconion provides digital advertising solutions to Fortune 500 brands across video, e-mail and social media platforms.

    Kontera, on the other hand, is a big data company which allows advertisers and agencies to make real-time decisions about their advertising campaigns.

    The move to buy these companies comes as the market moves towards one with multi-channels, where a single user is on multiple platforms, said Mark Strecker, chief executive of Amobee.

    As the industry continues to grow rapidly, chairman of Amobee, Allen Lew, said that it needs to accelerate its trajectory.

    Mr Lew, who is also chief executive officer of SingTel's Group Digital L!fe, said he is confident the acquisitions will aid in grabbing market share.

    Amobee's revenue has tripled since it was acquired by SingTel in 2012, to $113 million last year, but it is still running at a loss.

    Maybank Kim Eng analyst Gregory Yap said that the digital advertising market is a highly competitive one with the likes of Google and Facebook, but Amobee could bring something different to the table.

    While advertising through Facebook might reach a large audience, the feedback will be skewed to its user demographic, which tends to be younger.

    "So if you were to just accept the information based on these users, you might be missing out on the older market with more disposable income," said Mr Yap.