Online And TV Ad Firm Spot Runner Lays Off 50 Employees, But Adding 40 More
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.
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Comments (7)
Aug 13, 2008 2:46 AM
These numbers are massaged just like all the garble coming out of Grouf’s mouth.
Add another notch to Nicks bedpost for sunken ships.
Aug 13, 2008 6:38 AM
Yeah, this company looks like a sinking ship. I’ve heard there’s no revenue relative to people hired or money raised.
Aug 13, 2008 9:12 AM
Spotrunner’s explanation of the situation doesn’t sound *that* different from ValleyWag’s report—though the numbers are different
The question is: Are they trimming staff from their core business and replacing them with folks more on the online/SEM side. Not that there’s anything wrong with online advertising or SEM per se, but if that’s what they’re evolving towards, what separates them from a million other similar shops that have raised far less money?
Aug 13, 2008 11:09 AM
I do not think their core business idea has worked so they are moving toward becoming an SEM—- how early 2000’s!
Aug 13, 2008 11:25 AM
Joanne is a smart executive. She is either waiting to meet some vesting period or has a plan.
Aug 13, 2008 12:24 PM
The web is all about good products. Unless Joanne is a great product visionary, her plan will be meaningless.
Aug 18, 2008 1:40 AM
Silicon Valley / San Jose Business Journal just posted that CheapTVSpots whooped the template ad factories like spotrunner for quality and lower overall cost. Apparently CheapTVSpots has won a ton of awards and already produces TV, web and mobile ads internationally. It’s self-financed by the owners. No debt. Nice interview on CNBC with their CEO, some young girl. Been in the black since 2001. Interesting David vs. Goliath story.