The mobile ad company AdColony cut close to 100 jobs last week, according to people familiar with the matter.
The company, which has placed software in thousands of mobile apps, cut back on its work force as it is moves to focus on more automated, or "programmatic" ad sales options. AdColony is also shifting away from selling generic mobile banner ads to more rewards based ad offerings–such as people watching an advertiser's video ad to receive access to content, points or offers, said people close to the company.
AdColony was acquired by Opera Mediaworks in 2014. At the start of this year, Mediaworks assumed the AdColony name. AdColony is a subsidiary of Opera Software ASA, a Norwegian digital media company.
Opera cited AdColony's disappointing revenue numbers as dragging down its overall performance during its most recent earnings report. The company said more advertisers were buying ads via programmatic channels, which generally delivered lower prices compared to directly sold ad packages. AdColony's direct-sold ad business declined 19% versus the same quarter last year.
Given that mobile advertising is a hot growth market, it's hard not to attribute AdColony's slip to the growing power of Google and Facebook, the industry's dreaded duopoly.
But in this case, AdColony may also be riding the ups and downs of the mobile gaming market, something Opera also noted during its recent earnings call. Mobile game publishers have long been heavy mobile advertisers.
Besides the AdColony deal a few years ago, Opera has also been part of a dozen different acquisitions, perhaps making some layoffs inevitable. As of first quarter of this year, Opera had 869 total employees. AdColony alone had 755 employees as of first quarter.
AdColony CEO Will Kassoy released a statement on the moves: "We have a plan in place that has allowed us to become the largest mobile ad platform outside of the social ecosystem, and as we continue to execute, we need to be agile, willing to take risks, and hyperfocused on the areas where we can win," he said. "The moves we made were part of the larger process of integrating all of the pieces we have at AdColony and ensuring we’re growing the company in a way that specifically fits our vision for the future of the mobile advertising space."
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