The worst seems to be over for the ad tech industry, which is showing signs of cautious optimism after the initial chaos of the novel coronavirus pandemic that resulted in a 50% drop in sales for some.
Much like the rest of the media industry, many ad tech companies were laid off on a large scale earlier this year as marketers cut their advertising budgets due to the pandemic. By the end of July, programmatic advertising spending had returned to relatively normal levels compared to the downturn in March and April. Now the current election cycle and the upcoming holiday season point to a slump in spending.
With money flowing again, ad tech companies downsizing are trying to realign their product and engineering efforts and realign their product and engineering efforts on trends that emerged during the pandemic and business goals outlined in January, before the pandemic's impact in the US USA performed.
“During Covid, the time cycle for everyone was shortened. We have all been focused on how to deal with the sudden drop in ad spend across the ecosystem, ”said John Gentry, CEO of OpenX. "But I think we are back to the problems that we wanted to solve by 2020."
In April, OpenX laid off 15% of its employees or took leave of absence. One day in May the company bottomed out, seeing a 50% drop in sales compared to 12 months earlier, Gentry said. Now the supply-side platform is slightly above last year's sales numbers and the company plans to fill around 10 open positions, particularly those related to its identity resolution product.
"You won't see us trying to go back to what we were a year ago in terms of headcount. I would describe ourselves as cautiously optimistic," said Gentry.
Ad tech companies had to juggle to turn on the lights and find a new way to identify and track people on the internet after Google Chrome announced in January that it would free the browser of third-party cookies by 2022. Since then, Apple has announced it will do so with the IDFA tracker opt-in expanding the disappearance of key data signals for ad tech companies.
Many companies also had connected television products on their 2020 roadmaps, and the rise in streaming as people stay at home during the pandemic means many companies are doubling down on that effort.
Ari Lewine, co-founder and chief strategy officer of TripleLift, said the SSP is accelerating its hiring over the next year because of the "tremendous growth we've seen in the business," particularly in the video space.
TripleLift had to cut 7% of its workforce in April. However, Lewine said the company has just completed its best third quarter in history and is actively trying to fill 50 to 60 positions to employ more than 400 people over the next year. TripleLift has also brought back some employees it was on leave, and it has retroactively repaid employees after reversed wage cuts.
Don't let yourself get so pushed that you can't handle a downturn.
Kelly Herrick, Founder of Searchlight
"Programmatic is more attractive than ever for brands and their agencies because you can stop and start with programmatic and quickly change your campaigns and advertising spending, which is … more valuable in times of uncertainty," said Lewine.
However, ad tech companies approach growth with caution, especially as few ad buyers have a clear sense of what their budgets are for 2021. According to Lewine, TripleLift has shifted from annual to quarterly planning.
Kelly Herrick, founder of Searchlight, a digital media recruiting firm, said companies are looking for talent in areas such as CTV, mobile and e-commerce, which usage has increased during the pandemic. However, many companies are in a "wait and see" situation, as they are planning for the next year.