RGM Group Raises $21 Million

RGM Group Raises $21 Million

Digital advertising firm RGM Group on Wednesday announced closing $21 million in funding from Riordan, Lewis & Haden Equity Partners. The Los Angeles-based company plans to use the new investment capital to ramp up its national sales force and technology development efforts.

In connection with the funding, RGM named former FastClick CEO Kurt Johnson as its new chief executive, succeeding founder Kamran Razavi. Razavi will assume the newly created role of chief strategy officer at RGM.

Started in 2004, the company has carved a profitable niche catering to premium brand advertisers online. The core of its three-pronged business is an ad network composed of 300 individually selected online publications across 14 specific content channels.

The RGA Alliance includes sites for well-known titles like Frommer’s, Men’s Fitness, and SmartMoney as well as niche sites, like Digital Trends and Urbanspoon.

The network reaches up to 143 million unique U.S. visitors and generates 8 billion page views per month. Razavi said the network is completely transparent for both publishers and advertisers. Marketers can make buys focusing on specific sites or channels and target according to different demographic, psychographic and behavioral criteria.

Advertisers using the platform to reach affluent consumers include American Express, Jaguar and Sony. These blue-chip brands have turned to RGM “to have their messaging come up beside, or in line, with premium content and premium context and the delivery format in which their ad is received,” said Razavi.

Razavi said the click-through rates for its ad formats typically exceed the online display average of about 0.9%. The billboard unit, for example, has a CTR of up to 2% while the persistent overlay has a rate of 1% to 1.5%, he said.

In addition to RGM Alliance, the company runs a business called RGM Exclusive providing exclusive media representation for a smaller group of high-end publishers OpenTable, and Razavi expects the number of publishers it represents exclusively to increase to seven to 10 in the next two years.

Johnson previously served as CFO of ValueClick after the ad company acquired ad network FastClick in 2005.

Johnson will oversee RGM’s next growth phase, which includes plans to double its head count to about 50 in the next year, especially with the expansion of its sales staff in New York. The company also plans to open a Chicago office this year to complement its presence in L.A., San Diego, San Francisco and Manhattan.

Along with Johnson, RGM has added Rob Rodin, Chris Lewis and Ryan Smiley as board members in relation to the firm’s investment.

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