Lean Startup: Vpon Mobile Ad Network
Harnessing an Army of Apps
In Taiwan only two websites are big enough to make money from advertising. But two 30-something guys have devised an alternative route, bringing together many small developers and harnessing a power akin to a swarm of soldier ants.
Harnessing an Army of AppsBy Chao-Yen Lu
From CommonWealth Magazine (vol. 464 )
AdMob is the world's leading mobile advertising network, with numerous smartphone apps relying on it to generate advertising revenue. As smartphone usage has continued to spread, mobile advertising has become an area that businesses cannot afford to overlook. Two years ago Google acquired AdMob for US$750 million.
Last August a Taiwanese advertising platform similar to AdMob was born. It has no connection to Taiwanese Internet advertising leader Yahoo. Instead, the Vpon mobile app joint advertising network platform was the brainchild of two 30-something entrepreneurs.
Vpon general manager Victor Wu and vice general manager Austin Huang attended university together, one majoring in electrical engineering, the other in electronics engineering. In late 2007 they started their business out of their homes, looking to eliminate the hassle of printing out discount coupons, by using mobile phone handsets as a platform for virtual coupons. Vpon's application software comes embedded in all Nokia 3G smartphone handsets sold in Taiwan, and advertising clients include Pizza Hut, the restaurant chain Wang Steak and the online learning platform Gjun.
Wu and Huang are unfazed that the concept of mobile advertising did not originate with them, as they understand that the key issue is understanding the market and responding rapidly to reflect demand.
"After the financial crisis lots of businesses were cutting back on advertising," Huang observes, to the extent that only the top two websites in terms of market share had a chance when it came to generating revenue from advertising. "And nobody can go up against Yahoo."
Vpon thereupon began its transformation, releasing its mobile app joint advertising network platform. At the outset, Vpon had only its coupon app to offer potential advertisers. Now Vpon is able to integrate with any app developer, so that advertisements appear across a wide variety of mobile apps. In other words, Vpon has stitched together an array of smartphone apps into a major advertising platform somewhat reminiscent of a converging swarm of soldier ants.
Moving into Mobile Ad Consulting
A lot of app developers are individually operated workshops that "really need an agency to help them with their advertising to increase revenue," Huang says. But these clients are quite small, and the numbers of potential downloaders of their apps may be quite small too.
"Traditional media advertising agencies won't take the time to go after these individual workshops. It's just not efficient," Huang continues. This leaves Vpon with a niche opportunity.
Vpon's app network platform now hosts advertising clients from cosmetics to banking.
"In the future we hope to move ahead and provide mobile advertisement consulting services," Huang says with optimism. Consumers of website ads and mobile app ads have significantly different habits, so it would be worthwhile to develop consulting services, he says.
Headquartered in the iPhone App Store, Vpon is spearheading an innovative breakthrough, one indication that a new wave of Taiwanese entrepreneurs is moving with greater agility than the Internet giants.
Translated from the Chinese by Brian Kennedy