Pigsback.com enters Canadian market

Sunday Business Post - Done Deal - Oct 28 2007

Online marketing website Pigsback.com has entered the Canadian market in a franchise deal with local operator Bell New Ventures (BNV). Under the terms of the contract, agreed in June, BNV, a division of Bell, the large Canadian telecoms company, will operate the Pigsback.com brand in Canada.

"You could call it an IP (intellectual property) licencing or franchising deal,” said Michael Dwyer, founder and chief executive of Pigsback.com. “BNV own the Pigsback Canada company. We are going to support them in all aspects of the business, including the technology bits, communicating with the members and producing content for the site, but primarily we are training and empowering them to do it for themselves."

As part of the deal, BNV has undertaken to invest CAN$10 million (€7.2m) in the new Pigsback.ca operation to finance set-up costs, staff and marketing.

“It is a very, very big opportunity for Pigsback. Canada is a very mature internet advertising market, and a company like Bell would be looking to take a very big share of that," O'Dwyer said.

“We will get a share of revenue and some support services fees as well. It would be premature to start quoting big numbers, but if it is successful this will be a very lucrative deal for us, as in multi-million lucrative annually.”

Dwyer said BNV approached Pigsback.com after the Canadian company had researched various online marketing options across the world. Initial contact was made early this year and the final deal was agreed in June.

The new Pigsback.ca site went live on October 16. The initial launch is centred on the city of Calgary, home to one million people, and the site will be rolled out across Canada during 2008. The total investment includes a CAN$1 million marketing spend.

"For the Canadians who are experiencing it, it may as well be a Canadian website,” said Dwyer. “You have the Pigsback system populated by local brands speaking to local consumers in a local accent. Early sign-ups of well-known national brands in Canada are well ahead of schedule.”

Pigsback.com was founded by Dwyer in 2000. It is headquartered at Citywest in Dublin and now employs 75 people.

This is Pigsback.com’s second overseas venture - its British operation, based in Soho, London, was launched in 2005.

Dwyer said the licencing arrangement was an effective method for growing the Pigsback brand.

"It is a realistic way of moving into new markets,” he said. “Our business is very investment heavy in the first few years as you have to try and build a brand and build a membership. This gives us access to a partner's capital to extend the brand much more quickly."

Pigsback.com’s turnover in 2006 was €4.5 million.

"We would expect to grow turnover to €6 million this year,” said Dwyer. “The Irish business is benefiting from very strong growth in internet advertising spend.”

Gareth Lambe, who was managing director of Pigsback.com in Ireland, has moved to Canada to oversee the set up the Canadian business, which is headquartered in Toronto and employs 15 staff.