Once upon a time, having a nice view among city office skyscrapers was seen as the height of productivity and professionalism, a symbolism of the company’s success. Working remotely was a rare occurrence until COVID hit, but now there’s no looking back. Technology to accommodate completely remote teams has advanced so much now to the point where businesses are able to move their offices up to the “cloud”.
Interestingly, office spaces that once held such pride and joy is now perceived as non-essential operational spending for some. Automated media trading technology company Adslot (ASX: ADS) for example, has decided to shut down some of its “redundant” office spaces to cut costs.
The Company has taken this approach as a strategic decision to reduce its normalised cash burn, based on FY2022 revenues, to approximately $2 million from $4 million in the December 2022 quarter. Several office spaces will be maintained on a reduced basis for non-development related staff, and these reductions are to be implemented by July 2023.
In addition to cutting office lease spending, the Company has reduced operating expenses including software licensing costs, headcount cost based on a re-organisation of currently vacant roles and recent staff attrition, whilst also ensuring limited redundancies of development and sales resources (which have been done in March 2023).
Commenting on the strategic decision, Adslot CEO Ben Dixon said, “These cost reductions are the latest in a continuing focus on cost within the Adslot business. Critically, this reduction in cost positions us well on a pathway to profitability.”
“The next step is to grow revenues to bridge the remaining gap, and the Company is well positioned to do this following record trading on the Adslot Media platform in the September and December 2022 quarters, and the ongoing activation of already contracted clients in the US, UK and Europe.”
Adslot simplifies media buying by providing workflow (Symphony) and media trading automation (Adslot Media) technologies to streamline the direct buying and selling process of premium display advertising. The Company aims to increase the value of advertising for marketers and collaboration between global media agencies, publishers and advertisers. Adslot’s tech equips brands and agencies with one simple interface with features such as see and reserve priority premium publisher inventory, full transparency into ad placements and pricing, and allowing advertisers to spend 100% of their media budget on working media.
Headquartered in Australia with operations across North America, Europe and Asia Pacific, Adslot is also the parent company of Webfirm, an Australian-based digital agency providing website design, hosting, search engine optimization (SEO), search engine marketing (SEM) and social media marketing services to SMBs.
The Company announced that it had engaged East Wind Partners to assist with US-based corporate development activities, having met numerous industry players that led to a number of important partnership opportunities.
This includes one of Adslot’s most notable partnership announcements with US ad tech business Operative. The partnership, called Marketing Alliance, enabled Adslot’s client base of media buyers that include GroupM, Publicis, Omnicom and Aegis/Dentsu to be integrated with Operative’s premium sellers that include NBCUniversal, Wall Street Journal, Comcast and iHeartMedia. Publishers could dynamically upload all of their inventory with complete product and pricing information from their Operative product catalog directly into Adslot’s trading platform for buyers to purchase. In addition Adslot would transpose all transactional data into Operative’s system to provide publishers with a real time view of their available inventory.
However, Adslot later claimed that selling its key assets is “unlikely to be in the best interest of shareholders”, considering the current investment climate and the Company’s current market capitalisation, subsequently ending the Adslot-East Wind partnership effective mid-April 2023.
In the first half of FY23, Adslot acquired $4.7m group revenue which was a 2% increase on previous corresponding period (pcp). It concluded the half year with $1m adjusted EBITDA loss and $2.8m adjusted net loss after tax, each were down 3% on pcp.
Clara is a Business Reporter for The Sentiment.
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