O2 UK acquires Weve mobile advertising JV from EE and Vodafone

UK operator O2 has acquired the interest held in mobile commerce outfit Weve from its joint venture partners EE and Vodafone. Weve will now operate as a wholly owned subsidiary of O2 UK.

Speaking to Telecoms.com David Plumb, Digital Director at O2 UK, explained the thinking behind the deal. “Weve was originally set up three years ago to do payments and advertising,” he said. “The advertising business has gone really well – 40% annual growth last year – and we decided to stop the payments business last year because others, such as Apple and Google, are better placed to lead on things like payments and wallets.

“In digital advertising it’s all about scale and having as many opted-in adults as you can. Through the other digital businesses we have, things like O2 wifi and Priority, we will now be able to put 20 million extra opt-ins into Weve. I think for the other shareholders, who perhaps don’t have those other digital businesses, maybe they don’t place the same value on it as we do. All the initial investment is done and it’s already making a profit, and now this change will accelerate the profit we make for O2.”

Plumb went on to explain that the UK mobile advertising market is booming – doubling in size to £850m last year – as operators, advertisers and consumers increasingly appreciate the value of it – especially when it comes to targeted messaging.

“The airline Monarch wanted to advertise to adults over the age of 25 who had previously travelled to the sorts of countries they fly to,” said Plumb. “So we served adults who lived within 1 mile of a Monarch airport and served them with a picture message with a £20 discount off a Monarch booking. 28% of people we served that ad to said they were going to book a flight. Because of the quality of the data we were able to serve a very personalised advert.”

O2 is not revealing the financial details of the acquisition, but in keeping with Telefónica’s broader digital ambitions this should put it in a strong position to capitalise on a growing mobile advertising market. As ever it’s biggest competitors are likely to be so-called OTT players, but the large opt-in audience Plumb mentioned will be an advantage.