The leadership team is out at LG Ads Solutions.
LG Ads (née Alphonso) is the ad tech division of South Korean electronics manufacturer LG. It came under the LG fold in January 2021 after LG took an $80 million (and just slightly over) majority stake in Alphonso earlier that year.
AdExchanger has learned that as of Friday, at least two of Alphonso’s top brass were pushed out, including CEO Raghu Kodige and Alphonso co-founder and executive chairman Ashish Chordia. An LG spokesperson confirmed their exit.
Kodige, who was also an Alphonso co-founder, is being replaced by Adam Sexton as acting CEO effective immediately. Sexton will also assume the newly created position of chief operating officer.
Although Sexton has executive experience in the TV space, including as a former GM of Samsung, his most recent industry experience is as a former GM at Gracenote for one year between 2014 and 2015, several years before the company was acquired by Nielsen.
And the departures might not stop with Kodige and Chordia. Although AdExchanger was unable to confirm in time for publication, it appears that other C-level leaders on the LG Ads team may have also been ousted.
No IPO
But this shakeup isn’t about LG exiting ad tech, or any squeamishness about the ACR data underpinning its ads business.
According to LG, the exodus is the start of a “strategic transformation” to position LG Ads for additional growth.
But one does have to wonder how cutting Alphonso’s leadership team will help with that. The team tripled its revenue this year.
LG Ads/Alphonso generated roughly $100 million in 2021, which was its first year of business under LG. AdExchanger has learned that the group brought in nearly $300 million this year and has set a target to generate more than $500 million in revenue for 2023.
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Despite LG’s majority control of Alphonso, the deal was arranged so that Alphonso had the option to take itself public within five years as of January 2021. If that were to happen, LG would get the equity but lose out on future profits unless it was willing to shell out a premium to increase its stake or buy the rest of Alphonso outright.
Booting the leadership could be one way to keep the LG Ads division within LG.
Betting on ACR
Back to the official line, LG will continue investing in its ad tech division.
The main offering is a targeting solution based on an opted-in ACR data set across roughly 30 million US households. That data mostly comes from LG smart TVs and Alphonso’s OEM partners, including Sharp, Hisense and Toshiba.
LG Ads also has AI-based solutions for audience suppression and reach extension and tools for campaign measurement. Advertisers can work with LG Ads to buy inventory across LG TVs.
Despite potential privacy concerns related to ACR data – it’s not always clear, for example, how totally kosher and informed those smart TV opt-ins really are – LG appears to be going all in on ACR.
In a statement released after AdExchanger’s inquiry, Matthew Durgin, the chair of Alphonso’s board and a senior director at LG Electronics USA, said that the changes will “strengthen the relationship” between Alfonso and LG Ad Solutions and LG Electronics. With its new leadership, LG plans to “further develop the company’s ACR capabilities.”
