Can Samsung compete with Apple as a digital powerhouse?
In a clear sign of its aspirations to be a digital powerhouse along the lines of an Apple or Google, Samsung will introduce a mobile private ad exchange later this year.
Samsung Electronics said this week that it is teaming up with OpenX Technologies to launch the advertising exchange for global mobile inventory. By adding advertising to its existing hardware and platform services, Samsung is trying to assemble the pieces necessary for becoming a major digital player.
?It seems like the move is part of a broader initiative on Samsung?s part to outdo Apple by building not only devices and platforms but also advertising and really assembling all of the assets to be a major player within the digital ecosystem,? said Noah Elkin, principal analyst at eMarketer, New York.
?In order to extend its reach in some way in the market, Samsung needs to have a play on the advertising side as well,? he said.
?It is not unlike what Apple did with iAd.?
The Samsung AdHub Market, which is being developed with OpenX, will enable advertisers to purchase mobile inventory from mobile developers and Samsung Electronics. It will offer real-time bidding capabilities so developers can maximize their ad revenue as buyers compete for each impression in an auction with a minimum price.
The AdHub Market is expected to launch in the second half of 2012.
While ad exchanges are not as prevalent in mobile as they are in desktop, they do offer some advantages to advertisers in the mobile space.
?With the degree of fragmentation that there is in mobile, exchanges might help and make mobile an easier ad buy,? Mr. Elkin said. ?Ultimately, there are a couple of exchanges moving in the direction of unifying desktop and mobile so a campaign can be planned across platforms.?
The mobile ad exchange builds on Samsung?s launch earlier this year of AdHub for SmartTV. The service enables brands to deliver 3D, video and other interactive advertisements into the living room via Samsung?s SmartTVs.
By trying to open up greater revenue opportunities for developers via the ad exchange, Samsung is also trying to attract the best developers to its platform.
?This makes Samsung?s platform in theory more appealing,? Mr. Elkin said. ?By having an exchange it maybe injects a level of ease into the marketplace.?
The ad exchange could help Samsung capitalize on the significant growth in mobile advertising, which is estimated to reach $20.6 billion by 2015.
The company may also want to build on its already considerable strengths in consumer electronics to become a bigger player in digital.
Samsung is the largest manufacturer of Android smartphones and is close behind Apple as the largest smartphone vendor in the world. The company is also finding success with its hybrid smartphone tablet ? the Galaxy Note.
Additionally, Samsung is a leader in consumer electronics more broadly, including televisions, cameras, laptops and home appliances.
At the recent Consumer Electronics Show in Las Vegas earlier this year, Samsung expressed a vision of the future where consumers? numerous household electronics, from TVs and laptops to fridges and dishwashers all communicate with another, per Mr. Elkin.
?You can see where advertising could easily fit across all of those devices,? Mr. Elkin said.
?It seems like Samsung, with its broader consumer electronics portfolio, is at least hinting in a longer-term perspective at how that device universe might work together in an advertising context,? he said.
The move to introduce its own ad exchange and get into the mobile advertising space, puts Samsung in more direct competition with Apple as well as with its own partner, Google.
?Apple is more of the bigger target here,? Mr. Elkin said. ?With all the rumors that Apple is entering the TV market, this seems like Samsung?s effort in part to get in under the wire."