The Gazette: Lawyer-turned-entrepreneur is flush with success
February 18, 2011 —
Michael Reha hasn't exactly followed the typical career path.
After studying law, passing the Quebec Bar and obtaining his master's degree from the prestigious London School of Economics, Reha went to work for the blue chip Montreal law firm Heenan Blaikie.
Then he gave it all up to pursue an unusual dream: selling advertising in washrooms.
"Both of my parents were entrepreneurs," he explained in an interview yesterday. "One day I called up my dad and said: 'I'm going to follow in your footsteps. I'm going to drop the law practice and start a company.' "
Then came the kicker: the new venture would target the nation's toilets.
Dad could hardly believe his ears. "He didn't talk to me for a couple of months."
But 15 years later, Reha's company Newad grosses $25 million in annual revenue from 20,000 ad boards, many of them installed over men's urinals.
It shares much of the Canadian market for ad boards with another Montreal-based firm, Zoom Media.
Both have about a 40-percent market share, he estimated.
Yesterday, Newad announced an $8-million investment in a new generation of digital message boards in Canadian cities, including $1.5 million to be spent in Montreal.
Most boards are installed in restaurants, bars, health and fitness clubs and universities, so that advertisers can target what he describes as "the young affluent."
"As a lawyer, you're always servicing clients, but I really wanted to work for myself," he recalled.
"I really didn't have much capital, so I had to find a business that had a low capital entry point."
At the time, there were already some message boards in washrooms.
"There were a couple of guys that were doing it in Toronto, but they had a really bad concept."
Reha figured there was potential to interest a national advertiser if a campaign was done right.
He had a partner at the time with a background in sales and marketing who thought the concept wouldn't be too difficult to sell.
"I quit my job on a Tuesday or Wednesday in Montreal, and Monday morning I was basically on the street in Toronto with a contract in my briefcase."
He told prospective clients: 'You're trying to reach young adults who are active. They're not sitting at home watching TV. What better way to reach them than where they go out to socialize?' "
But he soon discovered that despite knocking on every door he could find, there was zero interest in the idea. So Reha decided to put up some ad frames in Toronto at his own cost, just to see what would happen.
He used a Dr. Martens shoe ad featuring a dog chewing on a shoe, and "suddenly a lot of people started noticing." The shoe company placed some ads, and other customers quickly followed, including Molson.
The roster of clients now includes dozens of major advertisers, such as Rogers, Bell, Telus, Ford, Hyundai, Toyota, Perrier, Procter & Gamble and L'Oreal.
"Almost every one of the top 100 brands in Canada has used us for some project or another," he said.
The new investment in digital boards will include 22-inch high-resolution LCD screens and stereo sound, broadcasting 15-to 60-second audio and video loops.
Reha says the investment is being financed internally and he's managed to grow the business without a need for outside capital.
About 30 per cent of revenue is derived from event promotion and "experiential marketing" such as the launch of a new car.
"We have the vehicle on the street, with people to talk about the car."
Newad is moving into another promising area: providing audio and video content online for customers such as Tourism Montreal and the National Bank of Canada.
The company also publishes Nightlife, a magazine distributed free in Montreal bars and restaurants that features music, fashion and entertainment news, all aimed at the key 18-to 49-year-old demographic.
"Clients now have more opportunities to use different platforms to communicate with young adults," he says.
PETER HADEKEL
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