No One Has Noticed That 1,000 People Were Laid Off From Mobile Ad Companies This Year (VELT) | 9Digg - What the web is talking about right now 9digg.org/no-one-has-noticed-that-1000-people-were-laid-off-from-mobile-ad-companies-this-year-velt/ All those venture capitalists pouring money into mobile advertising startups might want to ask themselves why there have been as many as 1,000 layoffs at mobile ad companies and marketers this year. The mobile advertising business will grow to an estimated $7.29 billion in 2013, according to eMarketer. But the rising tide isn’t lifting all boats equally, it turns out. Here are the recent losers: Velti, the mobile ad network, laid off about 200 of its 1,125 staff in a shakeup in May. Headcount at Velti is now just 900 staffers, according to Mobile Marketer. Velti had $270 million in revenues in 2012, and reduced its revenue guidance for 2013 to $255 – $280 million — flat, in other words. Tapjoy, another mobile ad platform, cut 20 people or 10% of its workforce, according to Techcrunch. At the Washington Post, the entire mobile team was let go. Fishbowl DC said 54 jobs were axed. Zynga laid off 520 people, not all in mobile, but the cuts came in part because the company has failed to gain enough traction in mobile gaming (and the ad revenue that runs on top of it) to keep those workers employed. EA laid off hundreds of people as it struggles to adapt to the new, free-to-play mobile gaming world. And T-Mobile laid off 200-300 people despite getting the iPhone 5, which ought to be driving sales. Each of these companies is in a slightly different position. And you could certainly argue that the losses at Zynga and T-Mobile are not strictly driven by mobile ad revenues. Ad revenue at Zynga is still growing — it’s the in-game payments side of the business that’s in trouble. T-Mobile just merged with MetroPCS, and jobs eliminated there were duplicate redundancies. But they were also marketing related. Still, these are companies who a few months ago would all have argued that they were well placed to take advantage of the huge tide of money that is sweeping into mobile advertising. Today, it appears that they all made some miscalculations. Velti and Tapjoy are the most worrying. Velti is one of the largest pure-play mobile ad businesses on the planet, and it’s publicly traded. It provides virtually all services in the mobile “ad stack.” The company did not return a message requesting comment. Velti stock, which once traded above $10 in 2012, is now worth just $1.76. Mobile Marketer blamed turmoil in Greece and the rest of Europe as a driver of the decline. Some have whispered that the company may reconsider staying in its fancy new San Francisco offices. Tapjoy, like Zynga, appears to have suffered in its attempt to navigate the ever-changing world of incentivized mobile gaming, according to Techcrunch. It’s now got a new CEO, former Disney executive Steve Wadsworth. In a statement, the company did not describe what its specific troubles were: “We have made changes in our organization to position the company for continued growth. … In addition, there have been some reductions across the company to better align our organization with our business plan and strategic direction. We believe these moves will make us more competitive, productive and will enhance our ability to bring innovative products to market.” Tapjoy had taken more than $70 million in venture funding, according to Crunchbase. The likely macro cause of some of this consolidation is over-capacity in a highly commoditized market. While each mobile ad company claims they have a unique offering, once you strip away the PR jargon they’re often offering a similar set of products: ad placement in apps. There are literally hundreds of mobile ad/app companies out there right now, some with just a handful of staff each, subsisting on VC money in the hopes that some of that $7.29 billion will trickle their way. Many mobile ad companies do not make profits. They say they’re investing for future growth. Clearly, they will not all survive. Microsoft already walked away from the business: It cut its entire mobile ad division a year ago, according to Adweek. We may be seeing the beginning of a long, slow rationalization of the mobile ad world. SEE ALSO: LAST CALL: Who Are The Most Powerful People In Mobile Advertising? Please follow Advertising on Twitter and Facebook. Join the conversation about this story »
Posted on: Fri, 07 Jun 2013 21:58:24 +0000
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