Investment firm Palmer Rogers Encore Ventures Inc. has taken an equity role in Whistler, British Columbia-based-based RTOWN Communications, a digital out-of-home company that works on a franchise business model – believed unique in Canada if not North America.
Palmer Rogers Encore is a joint venture between Frank Palmer, one of Canada’s best known advertising executives (chair and CEO of DDB Canada; Queue Communications Group; Palmer Rogers DDB) and financial executive Mike Rogers. Under terms of the strategic partnership, Palmer Rogers Encore will provide RTOWN with business strategy support and financial management expertise as the company implements its aggressive growth strategy over the next number of years.
RTown ‘s ownsership also includes company founder Don McQuaid and venture capital company Canaccord.
RTown has two arms: one, it sells advertising for RTown TV with screens in 27,000 hotel guest rooms in Canada and Trinidad; and two, a digital signage operation that works under a franchise model. It currently has approximately 570 digital screens in eleven Canadian markets in independent retail outlets, doctors’ offices, grocery stores, gyms and coffee shops.
Under the DOOH operation, the company sells a franchise to an individual for a certain region or town, and that person has the exclusive rights to both handle both the installation of the digital signs (including negotiations, sales, installation) as well as local advertising sales.
On the screens (currently all vertical, none yet with interactivity), 20% is reserved for national advertising, and it is hoped by Tom Horler, president of RTOWN Communications, that the experience of Frank Palmer will help in increasing its national advertising.
“We have a sort of network of networks,” says Horler. “We work a lot with Adcentricity, if, for example, Adcentricity has a client wanting to target consumers who frequent coffee shops, we offer a whole group of independent coffee shops.
“We’d like to expand into retail chains, and we’d also like to expand into the U.S. market, but right now our focus is to get a larger, solid footprint in Canada,” says Horler, who worked for McDonald’s for 27 years in multi-unit franchising, marketing and as director of marketing for the Asia-Pacific rim).
RTown works with outsourced hardware companies and software from Starmont Media Services, Port Carling, Ont.. Content is provided by RTown’s own in-house studio. In addition to advertising, the screens carry local community content and live local feeds including weather, news and entertainment. The company also does theatre pre-shws and mobile advertising.
“With DOOH media spending growing rapidly, the company wants to take advantage of that tremendous growth,” says Horler. “Digital advertising continues to build momentum as media planners shift money away from traditional television towards a more targeted approach to advertising. Working with Palmer Rogers Encore, we will be in a better position to take advantage of this trend as we implement our aggressive growth plans.”
Over the past 10 years, RTOWN’s network has grown substantially based on its proven franchise model. RTOWN’s sales have doubled between 2006 and 2010 with the recent strategic acquisitions of Around Town Media and Onext Media Corporation. The company’s long-term goal is to be the dominant player and build a global company that provides a technology intensive service through a combination of organic growth, continued acquisition and merger.
“Media buyers and advertisers are hungry for digital out-of-home services because it provides consumers with information that fits with their interests so they’ll tune in, watch and listen,” says Frank Palmer. “RTOWN has strong fundamentals and its product is one of the best in the industry, which is why we’re confident that the company will grow so quickly and successfully.”