If they last more than two decades, most organizations would probably celebrate their 20th anniversary. When you’re best known for serving ads in bars and other places where NewAd inventory is available, however, it makes sense to celebrate at the same moment that marks the legal drinking age.
That sly reference to its core market is just one of several ways NewAd plans to mark its anniversary. Parties for clients and employees are scheduled in Vancouver, Toronto and its home base in Montreal. The company is also launching the Start-Up 21 Initiative, whereby NewAd will allow 21 innovative companies to benefit from indoor advertising campaigns of four weeks to help propel them to the next level of growth.
NewAd CEO Michael Reha talked with Marketing about the firm’s growth and long-term future.
Why do you think NewAd has been able to make it 21 years when the overall ad business has gotten so difficult?
When we started the business, the challenge for clients were to reach young adults 18-34. You know, people who were really active in urban centres. The premise was they were more difficult to reach with more traditional media like television and print and magazines. If you think 20 years back, there was no specialty channels, there was no internet, there were no smartphones, nothing of that sort. When we came into the market, it gave an opportunity to clients like Molson, which was one of our first clients. Then we just expanded nationally very quickly. We went from having a few hundred billboard to a few thousand and so forth. Today we have 40,000 advertising spaces in more than 5,000 venues in major cities in Canada. The first year in business I think we did $600,000 in revenues and now we’re almost $30 million.
Once the internet arrived in force, though, how did you avoid being among the disrupted?
When advertising online became more substantial than it was in the past — it was nothing 20 years ago and now it’s more than $3.5 billion in Canada — we were a little bit concerned that maybe our medium would be under pressure. But, what we realized is because it’s out there, because it’s out-of-home and unavoidable, basically, and we’re still targeting young adults and they’re still going out, it made us very different than television, newspaper and even online, which relies heavily on content to create traffic. We put a poster on a wall and people see it. It’s a very simple business.
Everyone talks about omni-channel and the need to have a marketing mix, but to what extent do you see CMOs really keeping indoor advertising as a priority in that mix?
We’ve never taken clients for granted, and the industry changes a lot, both in the media planning and the media buying perspective. One thing that’s sure is because we’ve grown so much, now we’re dealing with multi-national groups of agencies that have offices in Canada. They’re interested in getting good value for their customers, and we’ve been around for a long time, so the people that are running these agencies understand that there’s a mix to be made for different clients of different media. We’re still as viable as we were. It’s not growing exponentially, but it’s not declining. It’s increasing year over year, in some cases 2.5%.
You may have survived the competition from online advertising, but how are you integrating technology into what you do?
Technology has evolved in two ways. We have what I’ll call static boards, and printing those for a campaign is much more efficient today and faster than it was 20 years ago. We can send a digital file to a printer and it will be in Vancouver in almost 24 hours. On the other end of the spectrum we have 1,500 digital screens right now and we’re expanding that. We’re hoping to have 4,000 within the next three years. We can post an ad within half an hour — a client can buy an ad in Montreal from our staff and that ad can be running in campaign in Vancouver 30 minutes after we get the creative. That has made us very competitive in terms of lead time. On the internet you can buy an ad and have it posted immediately. With our digital network, we can do the same thing. What will change in the future is that clients, as they’re buying internet they’ll be doing the same with digital out of home. We’re currently building a platform for them to access our inventory directly in a very targeted way.
This interview has been edited and condensed.