Master Ad Plc (Maco) specialises in providing clients with creative out-of-home media services ranging from billboards, street furniture, transit and ambient advertising to made-to-order jobs. Noppadon Tansalarak, chairman of the executive committee and chief executive, discusses the company's strategy and outlook.
What is Maco's business model?
Maco is an out-of-home media (OHM) solutions provider offering advertising locations throughout Thailand as well as production services. The locations and services we offer are categorised as Maco space and non-Maco space. The former includes billboards, street furniture and transit locations while the latter involves specialised made-to-order services for events or specific OHM opportunities.
Next year we will expand the scope of our solutions by adding a Digital category, focusing on LED technology that will be installed in new and existing locations to add value for our customers.
How many locations does Maco have and how does it effectively manage them all?
Currently we have 1,200 locations or 85,000 square metres of space in Thailand, with a presence in 70 provinces, and we hope to reach 100,000 sq m by the end of 2014. Our locations are chosen for their ample foot and vehicle traffic as these sites are the most valuable to our clients.
We are currently building our own internal software application, OHM Hub, which is similar in concept to Agoda (a travel booking site) but for the advertising industry. OHM Hub will allow us to service our customers better. For example, if a client approaches us with an advertising budget of, say, 20 million baht and wants to target a specific audience, then we can immediately present a range of options.
Maco's financial performance has increased nearly 300% from 2010 to 2013. What are the reasons for this improvement?
It is a combination of multiple factors such as depreciation and the corporate tax reduction, although the main reason is that our staff are very proactive, constantly engaging with our customers to ensure that their needs are serviced. Because of their efforts, we have achieved high utilisation rates of 70-75% for our locations in the past few years, hence our continued improvement in performance.
VGI Global Media Plc recently bought 24.43% of Maco. What will be the impact of having VGI as a strategic partner and shareholder?
There are numerous positive aspects to having VGI as a strategic partner and shareholder. First, we see a combination of strengths as Maco is strong in the large-format advertising medium (billboards) and VGI is strong in the small-format medium (transit ads). Together we will be able to approach advertising agencies and customers to provide a full range of options that would best serve their needs.
The second benefit is that through VGI's parent company, the skytrain operator BTS Group Holdings Plc, we gain the right to manage all existing BTS columns and potential future ones as well.
What differentiates Maco from its competitors?
Effective OHM advertising is both a science and an art. We have been operating for 26 years and because of this we have a long trusting relationship with our customers due to our ability to understand their needs and provide solutions. We are able to provide to our customers a wide range of locations as well as creative design services to ensure that the first impression the target audience receives will leave a positive lasting impact.
What are the biggest risks facing your business?
Thailand is Thailand, so we have to accept that there are issues and manoeuvre our business accordingly to ensure that Maco is able to thrive consistently. This is a common theme among the private sector: regardless of political conditions, the private sector has been able to continue to grow and thrive because of its ability to look past the short-term issues.
What impact will the Asean Economic Community have on your business?
For the OHM industry in Thailand the impact will be minimal because the country has already been open to foreign investment for years. We hope that with the AEC we will see a reduction in advertising-related taxes. For example, when Maco imports advertising-related hardware, our costs increase by up to 50% due to taxes and levies. Thus we hope that this will decrease over time. Finally, should Maco want to invest and expand overseas, we expect that AEC should make this more cost-effective as well.
Where do you see Maco five years from now?
Maco will continue to expand on multiple fronts. Our aim is to further our alliances with VGI and other firms throughout the region to create a network and media packages that will make our business more effective. With the planned digital expansion with the use of LED technology that will add value for our customers, and with our OHM Hub that will feature both Thailand and other countries in Asean, we will be able to capture more of the OHM market.
The Executive Q&A Series is presented by ShareInvestor, Asia's leading financial internet media and technology company and the largest investor relations network in the region, with more than 500 listed clients. This interview was conducted by ShareInvestor. For more information, email admin.th@shareinvestor.com or visit www.shareinvestorthailand.com.