In the emerging mobile content and advertising market, Nokia hopes to expand its footprint beyond hardware. To achieve its goal the handset manufacturer agreed to acquire Enpocket to build its advertising platform.
Enpocket will lend its experience and technology in deploying mobile advertising across multiple formats such as SMS, MMS, mobile Internet advertising, and video. Examples of Enpocket-developed campaigns include one for the Ford Edge and another for McDonalds.
Though Nokia has a content and advertising presence in Europe, its wanted to expand there and elsewhere, including the U.S., through internal development and acquisition. The Enpocket acquisition follows Nokia's buy of social media sharing service Twango, as well as internal moves toward content publishing. Nokia also earlier laid out plans to make N-Gage a mobile gaming platform rather than a device-specific hybrid of a handheld game system and mobile phone.
"When we entered the ad business, we knew that the initial moves we were making from our own side wouldn't be enough," said Tom Henriksson, Nokia's director of ad services. "From the beginning of this year [we set out to] identify the players in the market. Enpocket was singled out as the first one." Nokia sees mobile advertising as a fast and growing market, said Henriksson.
Enpocket is expected to closely integrate with Nokia and "on day one be a truly global advertising business," said Enpocket president and CEO Mike Baker. While Enpocket maintains worldwide operations in Asia and Europe, Baker said, "Nokia is really the only company that could actually put out a global footprint in terms of the way advertising is bought and measured."
Nokia's content and advertising plans have potential to reach a worldwide audience of mobile consumers. "Nokia has literally every [wireless] operator as a customer in some form," said Baker. While the N-Gage and other Nokia content plays are specific to Nokia handset users, this acquisition signals a look beyond Nokia's footprint in the mobile world. "This merger is around open market for mobile advertising, not about market share," said Baker. "It's about a big player opening up and standardizing to get the advertising market to grow faster."
The sale of Enpocket to Nokia is one of several strategic acquisitions in the mobile sector, according to Roger Wood, SVP and GM at Amobee, a competing mobile services company. The most recent was the Publicis purchase of Phonevalley. Earlier this year Microsoft acquired ScreenTonic, and AOL acquired Third Screen Media.
Acquisitions in the mobile advertising arena will likely lead to the four categories of ad inventory, according to Wood. Inventory managed by the carriers, media and entertainment, device or branded inventory, and Internet companies like Google, Yahoo, MSN, and AOL creating advertising platforms. "These four categories of ad inventory will have different propositions for brands, publishers, and interactive agencies will likely create mobile specific media plans which will segment media buying by class of mobile advertising inventory.
Whether Nokia restricts content to Nokia-branded handsets as Wood predicts, or expands beyond its installed base to all mobile customers worldwide, its merging with established mobile service company Enpocket is attractive to both companies. Baker said the company had been frequently approached by large agency groups, Internet companies and other industry companies. "This deal is one that really made sense for us, and we were a little bit choosey with not doing a deal earlier," he said.
Baker is expected to lead the advertising unit once the deal closes. The acquisition of the Boston, MA-based company is slated to be completed in Q4, though optimistically Nokia's Henricsson said Nokia plans to close in October, pending customary closing conditions including the transfer of employees and customers. Terms of the deal were not disclosed.
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