LG Electronics of South Korea, one of the largest TV manufacturers in the world, has acquired a 60% stake in Alphonso, a California-based TV data and measurement firm, as it seeks to expand its streaming TV ad business.
- According to sources speaking to the Wall Street Journal, LG is investing almost $80m in Alphonso, with the option of acquiring the rest of the company within three to five years.
- Revenue from Alphonso will be booked under an existing business unit called LG Ads, and the combined entities are expected to generate $100m in revenue in 2021.
What it means
- LG says its investment forms a key component of its digital transformation strategy that focuses on AI, big data and cloud to change how consumers interact with their devices.
- In the same way that telcos feel they need to bring a content layer on top of their basic network capabilities, TV manufacturers increasingly see opportunities from supplementing their sale of TV sets with new revenue from advertising.
“The purpose of the acquisition is to leverage Alphonso’s software, data analytics, and media activation capabilities across LG’s home entertainment products, mainly smart TVs, and to better fulfil consumers’ needs on their content consumption” – Edward Lee, director of the LG webOS ad business team.
Sourced from Wall Street Journal