ReachLocal, Inc. (NASDAQ:RLOC), a leader in local online marketing solutions for small- and medium-sized businesses (SMBs), announced today that the company is continuing its international expansion by launching a ReachLocal franchise in Central and Eastern Europe (CEE). The franchise, OxataSMB BV, is led by Dr. Peter Wiedemann, former CEO of Ataxo, leveraging his considerable experience in building and growing successful online marketing companies in the region. The franchise agreement covers Slovakia, Czech Republic, Hungary, Poland and Russia.
ReachLocal is using the franchise model to quickly and cost-effectively enter the Eastern European market and will leverage its European infrastructure to support the new franchise operations.
In CEE, SMBs are transitioning their marketing spend from offline to online to reach the increasing number of consumers using the Internet, highlighted by online advertising in the region growing 19.7% from 2010 to 2011(1). With an Internet population of approximately 103 million users(2) in 2011, Slovakia, Czech Republic, Hungary, Poland and Russia are positioned for significant online marketing growth over the next several years.
“Just as we entered the Australian and New Zealand markets by working with key players that had an established local presence and proven online marketing expertise, we are excited to be working with the team at OxataSMB to expand the reach of our online marketing solutions into Central and Eastern Europe,” said Michael Kline, Chief Strategy Officer and President of Local Commerce at ReachLocal. “This franchise agreement is an efficient and scalable strategy to expand into this emerging, high-growth market.”
OxataSMB will operate and resell ReachLocal services under the ReachLocal brand in each country. The franchise will follow the ReachLocal direct sales model with local Internet Marketing Consultants leveraging ReachLocal’s technology platform.
“ReachLocal’s proven business model and best-in-class technology platform and services makes them the premier partner for us,” said Dr. Peter Wiedemann, CEO of OxataSMB. “We look forward to creating the leading online marketing company for small- and medium-sized businesses in the region.”
OxataSMB will offer small- and medium-sized business products and services that are developed specifically for the needs and budgets of local businesses, while optimizing and tracking the return on investment of each campaign. Designed to deliver calls and leads rather than clicks, ReachSearch™ distributes local advertisers' marketing messages through ads across search engines including Google and other key publishers.
About ReachLocal, Inc.
ReachLocal, Inc.’s (NASDAQ: RLOC) mission is to help small- and medium-sized businesses (SMBs) acquire, maintain and retain customers via the Internet. ReachLocal offers a comprehensive suite of online marketing solutions, including search engine marketing (ReachSearch™), Web presence (ReachCast™), display advertising (ReachDisplay™), online marketing analytics (TotalTrack®), and assisted chat service (TotalLiveChat™), each targeted to the SMB market. ReachLocal delivers this suite of services to SMBs through a combination of its proprietary technology platform and its direct, “feet-on-the-street” sales force of Internet Marketing Consultants and select third party agencies and resellers. ReachLocal is headquartered in Woodland Hills, CA, with offices throughout North America and in Australia, the United Kingdom, Germany, the Netherlands and Japan.
OxataSMB’s mission is to provide comprehensive online marketing services to meet the needs of small- and medium-sized businesses in Central and Eastern Europe. The franchise will operate locally as fully owned subsidiaries in the region led by Dr. Peter Wiedemann, former CEO of Ataxo, a leading online marketing agency for more than a decade. Ataxo and OxataSMB are owned by Garvest, a venture capital firm formed by the founders of the European online auction site Allegro.
(1) IAB Europe annual AdEx Benchmark survey (2011).
(2) Internet World Stats (December 2011)
Caution Concerning Forward-Looking Statements
This document includes certain forward-looking statements. These statements are based on the current expectations or beliefs of management of ReachLocal and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to (1) changes in economic, business, competitive, technological and/or regulatory factors, (2) failure of the AdWords strategic relationship with Google to produce expected results; (3) failure to compete successfully in a highly competitive and rapidly changing marketplace, (4) failure to retain key employees, and (5) other factors affecting the business operation of ReachLocal. More detailed information about these and other factors that may affect current expectations may be found in filings by ReachLocal with the U.S. Securities and Exchange Commission. ReachLocal is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.