Technological innovation and displacement means that over a hundred jobs are going to be lost following the AdColony layoffs in 2017, adding to the already hundred-plus people cut from the company earlier in the summer. Due to programmatic advertising—automated, algorithmic, ad-buying practices—the company is looking to make cuts to its sales department. The company is shuttering its mobile ad network company, AdMarvel, which it acquired in 2010. This will ultimately leave the company with a headcount of around 400 people, meaning that about 20% of its workforce will be lost following the latest round of job cuts.
The move towards programmatic advertising, which sparked the AdColony layoffs 2017, is being seen as an industry-wide threat to many jobs. Whereas the old process of advertisement placement involved sales teams on both the ad company’s side and the media’s side, now we’re seeing programmatic advertising step in and eliminate these workers on both sides of the transaction, instead using an automated ad sales process so that ads are directly targeted towards people they would be more likely to have an impact on at any given moment, with a fluid bidding system in place that is under the control of computers.
All in all, this move towards programmatic advertising could be the first step in a radical shift where automation will see many traditional advertising jobs be made obsolete.
With the closing of AdMarvel, AdColony will be exiting the ad mediation and ad serving business.
AdColony is owned by OPERA SOFTWARE SA (OTCMKTS:OPESY), belonging to the Opera Mediaworks division. The company’s stock value has deteriorated by nearly 30% since the beginning of the year.
AdColony to Lay Off Around 125 Employees as It Exits Ad Mediation
One of the primary reasons for the AdColony layoffs in 2017 is the automation that is taking place.
The most job cuts—the AdColony layoffs in November 2017, to be exact—were largely seen as a transition over to a programmatic ads-based business model. The industry acceptance of these automated ads, however, has been slow comparatively, staunching growth and therefore contributing to the need for these layoffs.
The company’s most recent revenue report showed a drop-off compared to a year earlier, partly due to this slower uptake of programmatic ads.
“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 hyper-focused on the areas where we can win,” said AdColony CEO Will Kassoy, according to Ad Exchanger.
“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.”
The AdMarvel shutdown will not be finalized until May 2018.
Programmatic Advertising Causing Job Cuts in the Ad Network Industry
Besides the AdColony layoffs 2017, the industry as a whole still finds itself staring down a crossroad.
The introduction of automated advertising has shaken up the way that business is done. Online advertising has long since dethroned more traditional mediums as the preferred channel to reach consumers. With more and more people living an increasingly higher portion of their lives online, the focus on digital messaging makes sense.
One of the most powerful tools available to advertising companies in the online world, however, is data. With all the information being created by every click, data can help advertisers specifically target consumers when they are most likely to buy, and also provide them with the most appealing advert. The days of mass-appeal campaigns taken out in newspapers and on television are dwindling, while hyper-targeted personality-based advertisements are becoming the new norm.
The speed and fluidity of online advertisement needs, however, means that automated ad buying is simply the more efficient and effective method for this type of advertising. The ability to analyze large sets of data and recommend products on a timely basis is simply beyond the scope of human ability, and as such, automated ad buying is increasingly coming into use. The result is a system whereby computers are choosing what ads we experience and when we experience them, in a constantly adapting online world that will offer you what the algorithm thinks would most appeal to you.
Companies are seeing layoffs across the industry, though whether this is due purely to automation, a lack of sales, or a combination of both is harder to parse.
AudienceScience, for instance, which calls itself the first advertising automation company, made cuts earlier in the year, leaving around 50 people without a job.
GeekWire obtained this AudienceScience statement following the cuts: “The latest changes at the company reflect our increasing shift towards better serving the agency side of the advertising business alongside our roster of global advertiser clients. AudienceScience will maintain all of its global offices and continue to focus on building great technology that serves both advertiser and agency clients.”
Other companies have also seen their workforce culled as a result of the shifting landscape. AOL, Inc. (NYSE:AOL) instituted reorganization plans, with about 150 employees being cut as the company folded several of its sites into each other. All of this took place in 2015. One of the reasons cited for the reorganization was a refocusing on programmatic advertising, not unlike the change we’re seeing following the AdColony layoffs 2017.
AdColony Laid Off Around 100 Employees in July 2017
The AdColony layoffs 2017 did not start in November, however. The company’s first round of job cuts this year began when more than 100 jobs were shed in July.
The AdColony layoffs in July 2017 were prompted, in part, by a shift towards programmatic advertising.
The AdColony downsizing, in total, brought the workforce down by over 25% between the two cuts.
“AOL To Lay Off About 150 People, Mostly In Sales; Folding Joystiq, TUAW Into Engadget,” TechCrunch, January 30, 2015.
“Digital advertising company AudienceScience cuts jobs amid shift in business,” GeekWire, January 13, 2017.
“Mobile ad specialist AdColony cut more than 100 jobs as part of a shift in strategy,” Business Insider, July 6, 2017.
“AdColony cuts 100 jobs as it shifts to automated ad sales,” Pocket Gamer.biz, July 6, 2017.
“AdColony Cuts 125 Jobs, Shuts Down AdMarvel Ad Server And Mediation Business,” Ad Exchanger, November 13, 2017.