The RGM Group figures out how to enable premium brand advertisers to target rich people via online ads. And weak economy or not, the company has benefited as those brands shift more of their budgets for chasing wealthy consumers to online publications.
The Venice, Calif.-based company has been profitable ever since Kamran Razavi started it in 2004 at the age of 25. In an interview, Razavi said the company still has momentum and tripled its revenues last year.
“We’ve got a unique model for premium brands,” Razavi said. “We have ads that hit the right person and do so in the right way. We really stand out in that way. We are more efficient when it comes to deploying advertising.”
In August of last year, the company’s RGM Alliance division, an ad network that places ads from premium and luxury brands, had more than 250 U.S. publications in its network. Those included Yachting, Luxury Travel, Burda Style, Zagat, Men’s Fitness, Woman’s Day, Elle, Boating, and Esquire (disclosure: and VentureBeat). Now RGM reaches 350 publications, including 34 new sites this year.
RGM now reaches 124 million unique visitors per month, compared to 117 million in August. In May 2009, the company had 21 million users per month at 66 publications. RGM is now the 61st-largest ad-focused ad network in the U.S., according to comScore. RGM expects it will enter the top 50 in the next month.
“We are still profitable and we haven’t had to raise money,” Razavi said.
RGM still screens its web site publishers so that it only reaches users that premium advertisers want to target. Razavi says the alliance continues to be transparent to both advertisers and publishers, with no hidden sites or traffic sources.
One of the big growth areas is custom ads created by one of RGM’s own divisions for the advertisers. RGM has created ads for Jaguar, Lexus, and ForeverMark on RGM’s own JustLuxe site, which has millions of unique monthly visitors. RGM is also expanding into mobile ads for the iPad, iPhone, and other platforms.
The company has 35 employees. Razavi said he is proud he didn’t raise a large amount of money, like other digital media companies do, diluting the entrepreneurial spirit. Razavi himself came from Tiffin, Ohio, and moved to Los Angeles with all of his belongings in the back of his pickup at age 22. Now at 32, he’s still a young buck.
“I hope my story will if nothing else inspire another young buck to venture out on their own and build a company themselves,” he said. “My story proves this is possible.”
For custom content, the CPM (cost per mil, a measure of ad revenue per 1,000 people) is something like $100. For standard ads, the CPMs are around $8 to $10 for the RGM Alliance. Lower-quality ad networks generate CPMs of $3 to $5.
Razavi said that premium markets have recovered since the recession of 2008-2009, and that has helped the company grow. But he said advertisers are still shifting a lot more of their ad budgets to online publications, and that has helped RGM grow even faster.
“On a global level, we still have a recession-like economy, but online ads could grow 23 percent in 2012,” Razavi said. “People are predicting that online will move past traditional media this year.”
Rivals include companies such as Glam Media, Travel Ad Network, and Conde Naste Digital.
Image courtesy of atyp_koK, Shutterstock