Samsung Mobile Exchange Key to Multi-Screen Ad Strategy

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Samsung Electronics yesterday said it would work with OpenX Technologies to create a new private advertising exchange specifically for global mobile inventory, signaling a growing desire among device manufacturers to snag digital content revenue.

The Samsung AdHub Market, expected to launch in the second half of 2012, will be available to advertisers that want to advertise on mobile apps on Samsung phones and tablets. In addition to serving third-party app developers, Samsung owns and operates some apps that will make inventory available.

Daniel Knapp, head of advertising research for IHS Screen Digest, said, "It's not surprising that they are trying to move from hardware manufacturing to monetizing through advertising, as well. In fact, you could wonder why other TV manufacturers aren't venturing into that space."

Earlier this year, Samsung formally launched its Samsung AdHub for SmartTV advertising. There are no immediate plans to connect the AdHub for phones and tablets to the SmartTV platform, an OpenX spokesman said, but it's possible that the deal will expand to encompass SmartTVs.

Knapp sees the latest exchange as part of a multiple screen strategy for Samsung.

"If you want to be serious about mobile advertising, you have to have multiple devices. It doesn't make sense to just occupy one device or one screen. And Samsung is in a much better position than other TV manufacturers because it’s in so many different screens. Taken all together, this becomes a very valuable advertising proposition."

Nevertheless, Knapp found it surprising that Samsung is focusing on real-time bidding. While RTB exchanges have helped online publishers optimize inventory and price, Knapp pointed out that there isn't excess, non-premium inventory in mobile.

Luxury brands are some of the biggest spenders on mobile advertising, he said, but their campaigns tend to be customized for premium placements.

"There's still so much opportunity in the premium and bespoke levels of mobile," Knapp said. "Further down the line, this makes sense."

There are already plenty of mobile ad exchanges. In March 2011, mobile marketing technology provider Velti launched mGage using assets it acquired through the purchase of Mobclix. It also provides white label exchanges to let publishers, agencies, networks, and media companies create private marketplaces. In December, Nexage opened its own private mobile exchangefor premium publishers and app developers.

And then there's the Google's AdMob-powered exchange, already delivering ads to the same Android devices that Samsung will target.

"Samsung turns into Google's frenemy," Knapp said. "And Google is obviously trying more aggressively to monetize than Apple, which can rely on high hardware revenue."

While Knapp sees little evidence yet of consumers cutting the cable cord in numbers, he said, "I see mobile as a puzzle piece in a wider strategy of having a direct content relationship with consumers through IP-based content, as gate keepers are falling away in the legacy industries. Or at least, that's the hope."