VGI has high hopes for Malaysian ad-media market under new partnerships
AFTER forging a joint venture with three Malaysian advertising agencies, VGI Global Media has set its sights on building a strong presence in that country as a total out-of-home advertising-media solution through new partners.
“Based on the size of the population and advertising spending via out-of-home media in Malaysia, we estimate that our company could generate about Bt1.5 billion in revenue from this market if our five-year plan is well in place,” Kavin Kanjanapas, executive chairman of VGI, said yesterday.
The company is interested in partnering with Redberry, the second-largest player in Malaysia.
Redberry manages various types of out-of-home media including advertising spaces and trolley ads at three main airports – Kuala Lumpur International Airport 1 and 2, and Johor Bahru Senai International Airport.
It rents out digital screens at more than 100 office buildings, places ads at TGV Cinemas and holds the concession to manage public-bus adverts in Kuala Lumpur.
It manages advertising on 1,100 public buses commuting throughout the capital.
“If the partnership deal can be reached, we will duplicate VGI’s success here in Thailand to revolutionise the out-of-home-media business in Malaysia, home to more than 30 million people,” Kavin said.
VGI is also seeking a local partner in Malaysia to provide a service like Rabbit Card and an online payment service in Kuala Lumpur to accommodate their clients’ use of data analytics to maximise their ads.
This is VGI’s latest move after establishing a joint venture called Titanium Compass with three leading ad players.
Initially, Titanium Compass will be 19:51:20:10 owned by VGI, Puncak Berlian (wholly owned by Redberry), Utusan Airtime and Ikatan Asli.
Titanium Compass has been awarded a 10-year concession from MRT Corp – developer of the new SBK or MRT1 metro line, the first heavy rail line in Kuala Lumpur, with a distance of 51 kilometres – to manage ad platforms at 31 stations and on 58 trains.
The project is expected to begin the first phase of operation by year-end and become fully operational by the middle of next year.
After that, Titanium Compass will raise its registered capital to a maximum 18 million ringgit (Bt148.5 million).
VGI may increase its holding in the company to a new level of up to 30 per cent.
VGI estimates the value of the out-of-home ad-media industry in Malaysia at between Bt6 billion and Bt7 billion, growing by at least 7 per cent a year.
Of total ad spending via out-of-home media in Malaysia, 80-90 per cent goes to billboards, with the rest to transit, cinemas and in-store media.
Kavin believes that within five years, billboards’ proportion will decline to 30 per cent while transit media will surge to 40 per cent of total out-of-home ad spending.
However, the billboard business will be the responsibility of its subsidiary Master Ad, which last year acquired 40 per cent of EyeBalls Channel to conduct the billboard business in Kuala Lumpur.
Besides Malaysia, VGI is seeking further opportunities in Indonesia, while Master Ad plans to expand into other neighbouring countries such as Laos and Cambodia in the near future.
