Layoffs continue at AdColony, which won't seek a new CEO

Brief:

AdColony, a mobile video ad company, cut jobs as part of an effort to streamline the business and restore profitability, per a report from AdExchanger. The Los Angeles-based company eliminated at least five senior and mid-level executive positions, and has no plans to name a new CEO after Will Jassoy left in December.
Andrew Dubatowka, vice president of product marketing at AdColony, last week added responsibilities for the firm’s North American performance business, including go-to-market strategy and driving game-related app-install revenue.
The latest job cuts follow two rounds of cuts last year. The company in November fired 125 people and closed its ad-serving and mediation business to focus on programmatic ads, which uses software for automated media buying and ad placements. The company also cut 100 people in July.

Insight:

Both mobile video and mobile programmatic ad sales continue to grow. However, the space is challenging as consumers prefer ad-free content and more platforms look for ways to meet this demand. AdColony has had a tumultuous year of coping with shifts in the mobile video ad market. The company lost money as revenue fell 34% to $84.9 million in Q4 2017 from a year earlier, while performance revenue declined 40% because of competition from mediation platforms, disappointing adoption of AdColony’s SDK and lackluster demand for new ad formats, including playables, per AdExchanger.

AdColony isn’t up for sale, and the latest job cuts are more of a reflection of its attempt to regain profitability. Parent company Otello, a Norwegian software developer, had $86 million in cash at the end of last year and no debt. It blamed a 30% drop in revenue to $99.2 million in Q4 2017 from a year earlier mostly on AdColony.

The company in February told investors said it expects AdColony to be profitable in 2018 on an adjusted EBITDA basis. AdColony’s remaining C-suite report directly to Otello CEO Lars Boilesen. Opera bought AdColony in 2014 to support its mobile ad arm, Opera Mediaworks. The unit this year was spun off into a separate company that changed its name back to AdColony.