Advertising - Friday, December 12, 2008
$75M Squandered, Advertising's Reactrix Shuts It Down
Reactrix Systems has raised more than $75M in venture backing from investors such as D.E. Shaw, Menlo Ventures, Mobius, Thomas Weisel and Worldview Technology. But now its URL takes you to a dead site.
Reactrix sold interactive projected ads in malls and movie theaters that actually seemed like a cool deal but which apparently could no be sold. There seems to have been some poor management at Reactrix but more specifically, ad buyers cut their experimental ad buys in down markets no matter how much they might like a channel and Reactrix fell victim.
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Sad to hear that, but Reactrix had fundamental flaws in several areas. I worked for an agency and met with them many times, but you'd be surprised at how many brands didn't want their brands being stepped on while on the floor. Even though their ad recall rate was through the roof, brand managers don't want kids kicking their brand. Also, their strategy was in malls, with the idea that people would see the brand and walk 20 ft and buy the product. well people don't by packaged goods (ie cereal, sodas, beer) in malls.
The company that go it right was MonsterMedia, the focused on walls and windows, thereby avoiding the floor. And they also focused on sports stadium with longer term contracts- and beer companies love that interactive shit. it works perfectly.
Posted by: eric at December 12, 2008 03:23 PM
Reactrix CEO Mike Ribero blew through cash like it was his own personal Visa card but it was the VCs money he spent on limos, and fancy dinners and first class plane tix. More important -- he didn't have any strategy so the company couldn't succeed.
Posted by: mr bun bun at December 12, 2008 06:17 PM
the problem with reactrix wasn't the profligate spending by the CEO- although I admit there were some issues there, but that in of itself wasn't the root cause of the failure.
by the way, Mr bun bun, the company did have a strategy...it just changed every three months.
Posted by: ex long timer at December 25, 2008 04:21 PM
The company was the worst managed company ever.
So many capable, bright motivated people pointed out the errors in the business plan. None of them were noted. the most obvious one was they ran house ads geared for kids in the advertising avails. This attracted more kids to play with them and alienated the advertising commnunity
Posted by: reactrix insider at January 30, 2009 05:41 PM
Tried to do business with them myself working for a large firm that has decades old relationships with retail. Their VP was keen, their CEO said he didn't need to partner with us. The content creation was costly, the hardware expensive and I don't believe it was as the article says that they failed because ad buyers cut costs with the latest downturn. They were hardly there in the first place. There have been a lot of other 'digital signage' companies that seem to come and go in an arc of about 18 months from start to finish. I've tracked dozens. It is very hard to get advertisers to give you long-term attention on something like this until your install base is large. The advertiser's focus (and budget) is elsewhere in existing proven outlets.
Posted by: nottoosuprisedreally at February 14, 2009 02:18 AM
Feedtank has also been doing custom interactive floor projections (along with many other things) since 2004.
Posted by: Feedtank at March 17, 2009 07:04 PM
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