- Novel business model aims to build new media ecosystem
- Regional ambitions for Malaysian startup
MALAYSIAN media startup VAV Apps Sdn Bhd has an unconventional ambition – to be the world’s largest media company that does not own any media.
VAV Apps’ product is the VAV App itself, what the founders describe as a ‘sonic deal magnet’ that uses the smartphone to capture inaudible soundwaves with embedded advertising in the form of vouchers, deals or other promotions.
Chief strategy officer Alden Leong and chief marketing officer Addie Leong, brothers who are also the co-founders, explain their aspiration using Uber as an example – the world’s largest taxi company owns no taxies.
“Wherever sound exists we can exist – radio, TV, even PA systems - so that’s how huge the market is,” says Addie.
Though this may seem ambitious for a small and lean startup, the co-founders are confident about the app’s potential to disrupt the broadcast media industry by turning the one-way experience it offers consumers into an interactive one.
How it works
Alden explains that most broadcast media advertisements to not have a real and urgent call to action. “People are looking at, watching or listening to the ad but are not really paying attention because there are too many ads surrounding them every day,” he says.
“The VAV app basically turns passive advertising into active advertising.”
Broadcast media advertising is unlike its digital counterpart because there is currently no means for direct interaction – there is no link to click on, for example. What VAV does is create a digital experience from the broadcast advertisement by turning the user’s smartphone into a second screen.
Alden explains using a recent client, Cantonese-language subscription television channel Astro Kah Lai Toi, as an example. The channel’s television programme VAV Choice, a food and restaurant guide, uses VAV to provide viewers an interactive experience. Inaudible soundwaves were embedded into the broadcast and throughout the TV programme viewers were reminded to use the VAV App on their phones to receive vouchers or deals that they could redeem at the restaurants featured on the programme.
Another client is Korean water filter company Cuckoo, who used VAV in a recent promotion campaign at a store in a shopping mall. The store used its public address system to broadcast music within which it embedded the soundwaves that, once captured on customers’ smartphones, provided loyalty points to customers.
Minimal effort, maximum results
Kah Lai Toi was VAV’s first big client; the TV programme began broadcast in May this year and ran until November. One benefit of the app is that is enables broadcasters to track impressions, something that is otherwise very difficult, perhaps even impossible, to do.
The incorporation of the interactive experience into the TV programme boosted viewership and garnered a total of 170,000 impressions and viewers saved about 17,000 vouchers that were received by their smartphones. The redemption rate of the vouchers was 18%, higher than usual.
Alden explains that, unlike QR codes, the app does not require much effort from users beyond turning the app on. “This means that what our technology does is target the ads at those who are actually interested.”
To further ensure that interested users avail themselves of the technology and deals, the VAV team is making the technology available as a plugin that vendors and service providers can add to their own mobile apps so that customers are able to obtain information about promotions from their smartphones as they walk into the stores, listen to advertisements or even walk past digital advertising that is enabled to broadcast the inaudible soundwaves. Plugins will allow VAV access to a vast number of users that it otherwise would not have.
The founders say that the usability and viability of the app is what convinced it clients, including big brands such as Cuckoo and Kah Lai Toi, to use it. VAV is currently in talks with another major local broadcaster and other big Malaysian brands.
“The technology is able to bring users from the online space to the offline space effectively,” says Addie.
Building an ecosystem
Though this soundwave technology is not new – mobile app Shazam, for example, uses the technology to glean information from sound media – the VAV founders say they are the first ones to monetise the sound media space.
VAV’s aim is to be seen as the go-to sound media company and Addie says the team is slowly building the sound media ecosystem by getting broadcasters on board with VAV and the technology.
Selling and working with such a novel product is not always easy; the team has come across clients who want to use the technology but do not know how to get the best out of it. “Sometimes we are put into a situation where we have to create the ideas ourselves,” says Addie, adding that his previous experience in an advertising agency and Alden’s as a media strategy planner certainly come in handy.
“It’s quite tough as a new startup, especially with a technology like this where you have to create a business model that doesn’t already exist. But you just have to do it,” says Alden.
VAV has, in fact, grown quite quickly mainly because of the founders’ belief in moving fast. The idea for the app came into being in September last year and they had the business plan ready within two weeks, were in talks with Kah Lai Toi that same month and approached Cradle Fund, Axiata and government agency Teraju for investment opportunities in October.
The funding from Cradle, Axiata (through the Axiata Digital Innovation Fund) and Teraju’s Facilitation Fund came in this year and catalysed a lot of growth within VAV, allowing it to improve the technology packaging and venture out of Malaysia into the region. (It obtained funding of US$111,644 (RM500,000) through Cradle's CIP 500, US$267,947 (RM1.2mil) from Axiata (through the Axiata Digital Innovation Fund) and US$111,644 from Teraju’s Facilitation Fund)
“We need the scale and to move really fast. But I wouldn’t say it’s been very smooth because along the way we made a lot of mistakes,” says Alden, explaining that it was a steep learning curve but the team is better for it now.
Taking over the world
VAV is looking to expand into China – a hard market to break into – and has signed with a regional broadcaster called Nanning TV. Though the reach in China is not as wide as the founders hope it will one day be, Alden says that having the China numbers to show to other regional players will give VAV a leg up.
Other regional markets VAV is looking at are Indonesia, Thailand and Singapore. “The US and UK are definitely on the books, but we can’t say when exactly. It depends on how our current deals go. We need to settle our own region first,” says Addie.
“I really want to see it happen in the next five years – our technology in as many countries as possible and with high usage.”
The founders see high usage rather than revenue numbers as the company doing well and being on the right track to disrupt the market. “A good startup needs to disrupt the market,” says Addie. “Eventually, we want to build a Silicon Valley-type business in Malaysia and empower other entrepreneurs by showing them that success is possible.”
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