SAP Introduces SAP XM, Forays Into Digital Advertising

Enterprise application software provider, SAP SE (DE:SAPG) (TO:SAP) , recently ventured into the digital advertising market with the launch of a coherent online media network -- SAP Exchange Media (SAP XM). This platform will seamlessly unite advertisers and publishers over cloud, sidestepping intermediaries.

Built on the SAP HANA platform, SAP XM will fundamentally improve advertisers' return on media investment by deploying an online media network that uses real-time technology. Some of the major benefits accruing to the clients include the ability to take advantage of strong end-to-end advertising ROI analytics, higher customer conversion rates through superior targeting and superior user experience.

Meanwhile, the complex digital ad-buying process makes connectivity between different components of media business including brands and retail, ad budgets and inventory and billing and collection of paramount importance. In this regard, SAP XM has been designed bridge the gap between buyers (advertisers) and sellers (publishers) and also cut down on the conventional media buying process. As the new platform can combine marketing and advertising technologies, it has the potential to transform the way businesses conduct marketing in the digital era.

As per reports by technology and market research firm Forrester Consulting, the market is a booming one as 90% of advertisers and media houses believe that the SAP XM platform is revolutionary and will bolster the operational efficiency of the companies that adopt it. Meanwhile, SAP XM is busy signing "co-innovation partnerships" with companies like Beiersdorf, Deutsche Post (DE:DPWGn) DHL Group and EY to gain a better insight into the existing hindrances in the media buying process and figuring out ways to remove them.

We believe this recent venture by the company will bolster the company’s cloud business. Of late, the company has been witnessing exceptional growth in both its traditional and cloud business, adding to its strength. Notably, stiff rivalry in contemporary markets calls for technological superiority over peers, and we believe SAP, being the leader in efficient software tools, will continue to benefit from these initiatives.

SAP currently holds a Zacks Rank #2 (Buy). Other favorably ranked stocks in the same space are CommVault Systems, Inc. (NASDAQ:CVLT) , DST Systems Inc. (NYSE:DST) and Manhattan Associates, Inc. (NASDAQ:MANH) . All the three stocks sport a Zacks Rank #1 (Strong Buy).