Earlier this month, for example, Business Insider reported that ad tech vendor Viant plans to lay off 13% of its staff.

It was the latest in a flurry of job cuts so far this year. Infosum let go of 12% of its workforce, Taboola lost 6%, Integral Ad Science cut 113% while Unity and AppLovin laid off 4% and 13% respectively.

That equates to around 780 people who have lost their jobs in recent months and all signs point to there being more to come.

Potentially more cuts

“We made cuts earlier this year,” said one exec of a privately owned ad tech company. “But I’m not sure that’s going to be the end of it. We have finance people scrutinizing our budget requests more than ever, and my bonus scheme has been revised. We definitely over-hired over the last two years, and I worry there’s going to be a reckoning.”

Hiring more people in a sustained period of growth is a common predicament in the tech space. The ad slowdown has shown how wide off the mark those hiring sprees were. Perhaps more so in ad tech, where so much of how companies make money is predicated on the amount of dollars they have flowing into their platforms they can subsequently take a cut from.

Sure, ad tech bosses could accept lower profits or increase the cut they make from those ad dollars to protect profitability. But the fact that these companies have opted to cut job costs may indicate that neither solution is either realistic (unless they want to get slammed by Wall Street and investors) or possible (because it would be shameless to try and hike up already high take rates).

“We’re seeing commitments from buyers to publishers not being delivered as in the upfront commitments that we had brokered are coming in well under 100% right now,” said a commercial director at a publicly listed ad tech vendor on condition of anonymity.

And this is from someone at a public ad tech company that hasn’t made any cuts — yet. Even the largest players are feeling the pinch.

“This is the sort of thing that happens during a downturn for a business like ours,” said the exec. “The publishers that sell impressions via our business are prioritizing those companies that give them better access to demand. They always do, of course, but there’s definitely more urgency now to lock ad dollars down.”

Stretching dollars

The money is just not showing up in the way it once did for ad tech companies. payment terms are stretching longer and late payments are becoming more prevalent.

One source, who requested anonymity, as they weren’t cleared to speak …read more

Source:: Digiday

Author: Aaron