Spot Runner, the heavily backed and high profile online and TV ad agency based in Los Angeles, laid off about 50 employees, the company confirmed to me late today. Rumors to this effect started leaking out earlier today and last week, though the numbers were wrong, and the company says read too much into the reasons for these changes. Company spokesperson Rosabel Tao, VP of corporate communications, told me that the layoffs constitute about 10 percent of its employees, but at the same time, it is hiring another 40 employees in various positions, so will come out about the same as before.
The reason? Tao says earlier this year, the company started to reorganize itself along three business lines. The company started as a TV ad seller using online, focused on small businesses, but has grown from there and added online/search, radio and other local sales channels to its portfolio. To build on those, it recently did some major hires, including former Interpublic CEO Mark Rosenthal as president of Media Platforms and vice chairman, and Joanne Bradford, former head of MSN, as EVP. Rosenthal is heading the media platforms, Bradford oversees national marketing services and Kurt Weinsheimer manages local marketing services. As part of that reorg, these redundancies were made.
Tao also dismissed any rumors about company’s financial troubles, saying the company has plenty of cash in the bank: the company raised a big $51 million fourth round earlier in the summer from an international group of investors include UK media group *Daily Mail* and *General Trust*, Spanish-speaking media giant Grupo Televisa, hedge fund Legg Mason Capital Management and French luxury group Groupe Arnault/LVMH.
Even with these diverse lines of business and the large fundings, it will be interesting to see how the ad market treats brokers/agencies like Spot Runner…early next year, when the ad markets may get worse, is the real test of the company’s resilience.