Mobile advertising company AdColony is laying off over 20% of its workforce in a shift to focus on programmatic. The company will also be dropping its mediation and ad-serving business in favour of a programmatic focus.
On Monday, the company announced that it would close mobile ad tech firm AdMarvel which it acquired back in 2010. AdMarvel will continue to operate until May 2018, although the ad exchange part of AdMarvel will remain active as part of the AdColony platform.
The cuts mean that 125 people are losing their jobs. The news come just after AdColony let go 100 members of staff in July this year.
Around 400 employees are remaining at the company.
CEO of AdColony, Will Kassoy, explains:
“My aim was to have a softer transition and bring everyone into our new business over time rather than having to let people go. But advertisers aren’t looking to us for ad serving and mediation anymore, and as those areas have dried up, we haven’t been able to grow the core areas as fast as we’ve wanted to.”
AdColony now seeks to hone in on performance advertising as well as scaling its programmatic business arm and launching more mobile video inventory.
However, growth has been slow due to programmatic still being a fairly untapped area in mobile video and in-app advertising. But that is where AdColony sees an opportunity.
“Now we’re putting all of our resources into areas of future growth, into places where we can add value, and that’s video and the app-install market. Programmatic is clearly how more and more advertisers want to do these transactions,” Kassoy adds.
Programmatic now represents around 20% of the company’s revenue, but AdColony hopes that it can scale to 50% in the near future.
Kassoy believes that mobile mediation needs will decline over the next few years with publishers looking for improved transparency. Indeed, ad serving is becoming more of a commodity and publishers are taking it in-house.
“We want to be the largest independent in-app mobile marketplace outside of social with high-quality demand and supply. You can’t just be arbitraging media anymore,” he adds.