Home Investment Sizmek Emphasizes Growth In Core Ad Platform, Downplays Rich Media Decline

Sizmek Emphasizes Growth In Core Ad Platform, Downplays Rich Media Decline


sizmek 02Sizmek’s earnings story quarter by quarter seems to be on perpetual repeat, but the company exceeded the pessimistic predictions of Wall Street analysts, posting Q4 2014 revenue of $48.9 million, a 3% YoY increase, and FY 2014 revenue of $170.8 million, a 6% YoY increase.

The company suffered more expected declines in Flash-based rich media, which spiraled 34%, though its “core products” revenue – including mobile, video and data products – did well. Read the release.

Seventy-seven percent of that Q4 revenue came from those core products, which increased 30% YoY. Within that category, mobile revenue grew 62%, in-stream video revenue grew 51% and data-driven products (programmatic, viewability and ad verification) grew 73%.

CEO Neil Nguyen mentioned client wins like Unilever and Sears using Sizmek for video, and Bank of America and IBM using creative workflow products.

While this brings hope, it still must be disappointing for a company that had desired to return in its entirety to double-digit revenue growth. Naturally, CFO Ken Saunders hoped investors would think of the rich media unit separately from its core products division – which he said is much more indicative of Sizmek’s direction.

Over the past year, Sizmek worked to consolidate its various ad tech assets into a single platform, called MDX – which according to Nguyen has 4,000 active clients.

Its also revamping its sales structure under the leadership of global CRO Liz Ritzcovan, who is “doing a lot of work to realign around our growth products and our go-to-market strategy,” according to Saunders.

However, both the realignment and the process of onboarding clients onto the MDX platform will result in some additional costs edging into 2015.

“In 2015, we’ll transition partners onto the new platform,” Nguyen said. “We’ll run some duplicative costs having our older platform and our newer platform in parallel.”

He also updated investors on Sizmek’s Q2 acquisition of Aerify Media, which was purchased for its in-app tracking capabilities and which Nguyen claimed is “in large part integrated” into the greater Sizmek ad stack.

Finally, Nguyen gave his thoughts on Facebook’s ad server, Atlas, which is now a greater market presence than it had been a few months ago. Nevertheless, Nguyen claimed that hasn’t really been competitive with Sizmek, which fields the MediaMind ad server.

“We know our clients view the most valuable capabilities within the Atlas offering [as] the Facebook Audience Network,” he said, adding that those clients would prefer to use an independent ad platform instead of one owned by a publisher.

“The Atlas suite isn’t as competitive as Sizmek’s,” Nguyen said. “We see additional competitiveness, but no competitive losses in the past four to six months.”

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