Collective Splits Media And Tech Divisions, Lays Off 20% As Agencies Pull Back

JAhsAs revenue from big agencies fizzles, ad network Collective is trimming down on staff and shoring up its technology investment.

The company has split into two independent operating units, one focused on tech and the other on media services. Collective also laid off 50 employees across the US this week as part of a 20% overall spending cut on the media side.

The changes come in the wake of a steady decline in revenue from big agencies, primarily holding company clients, which have increasingly turned to their own trading desk operations to handle programmatic buying.

“All signs point to continued compression within this sector,” CEO Joe Apprendi said of the media agency trend.

As a result, he said, the company will refocus on areas of opportunity, including independent agencies and regional markets, pointing to cities like San Diego, Minneapolis and Atlanta as places where the company will double down.

“We’ve seen incredible growth in those sectors,” said Apprendi. “They have good data, content, creative, but are still in search of a strong programmatic trading desk.”

The news comes in the wake of Pubmatic and Turn also announcing considerable layoffs and strategic pivots.

On the technology side, Collective’s primary offering consists of VISTO, a self-serve ad-buying platform launched earlier this year, which Apprendi said the company plans to spend more than $12 million developing in 2016.

The company split is more an internal reporting change than a true breakup. Apprendi said the reporting structure has been adjusted so a general manager who leads media reports directly to him. Collective also has created a separate leadership team for VISTO, but both sides will remain under the Collective banner.

There will no longer be any employees below the CEO who support both media services and tech, as was the case under the company’s previous structure.

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