Amobee was once positioned as the world’s leading independent advertising platform—but now it is expected to lose millions of dollars in revenue in the next few years. The million dollar question is: Can Amobee bounce back?
Amobee is a digital marketing platform owned by Singtel and serves some of the world’s biggest brands and agencies, such as Kraft and Williams Sonoma. During the last four years, Amobee seemed to be unstoppable and was on a buying spree, acquiring global technology giants including Turn and Videology. However, Singtel has just announced that Amobee is in the red with an expected US$31 million in losses. So, what went wrong with Amobee?
The biggest contributing factor to Amobee’s losses is the reduction in marketing budgets as companies struggle to remain solvent while retaining employees. Amobee is not the only one feeling the pinch in the advertising world; according to an article in the New York Times, advertising spending was expected to go down by at least 25% in 2020 and is unlikely to recover until the year 2023.
Another factor that may have affected Amobee is Singtel’s lack of extensive experience in operating digital marketing companies, as Singtel chief executive Yuen Kuan Moon admitted. Although Yuen believes that digital advertising is an attractive growth sector, he acknowledged that they might need to find the right partners to help Amobee reach new heights.
Can Amobee bounce back?
The good news is, Amobee can bounce back from its disappointing 2020 performance.
One thing that digital marketing companies need to do is to maximise their human resources while taking advantage of technological advancements. Some digital marketing companies, like the Omnicom Group, have grown so large that they had to lay off 6,100 employees and implement pay cuts. In a bid to reduce operating expenses, the Omnicom Group even had to let go of more than 1 million square feet of office space.
How can companies like Amobee maintain their usual output with reduced manpower?
Digital marketing companies can use Professional Service Automation (PSA) software to streamline workflow and automate simple office tasks. A PSA can help process paperwork, take care of scheduling and timekeeping, and provide a thorough analysis of projects and marketing trends. With the help of a PSA, a digital marketing company can be effective even if it has fewer employees.
Digital marketing companies like Amobee can also explore hiring project-based or part-time employees to streamline their payroll. With project-based employees, companies will only have to pay those who are currently working on a project.
The hiring of project-based employees can also include the possibility of hiring remote workers. Remote workers can help Amobee reduce operational costs because they won’t take up office space nor use utilities.
“First thing that comes to my mind is its cost saving. You can definitely save on a lot of things. (Rent expense, utilities to name a few). Aside from that, most of those who apply for remote work already have their own equipment so you can check that off as well to your expense list. Second is that it saves time. Usually, training isn’t much necessary for project-based employees since they already are experts at what they do. You hire them based on your requirement and the specificity of the skills they have,” said Kram Mikhail Santos, Senior Digital Marketing Specialist at AEROWORX Asia.
Another advantage of hiring remote workers is that the company doesn’t have to limit itself to workers in its home country because remote workers can come from and work from anywhere. This means that the company can expand its talent pool to include those from other countries who might contribute fresh ideas that can help Amobee get ahead of its competitors.
“The process [of hiring remote and project-based employees] is actually quite fast. Since we’re looking for someone with specific skills, narrowing them down is easy,” added Santos.
Amobee should also continue with its clients’ innovations, such as the enhancements to its global digital-out-of-home offering that can enable advertisers to execute cross-channel marketing that works on digital, TV, and social media platforms. These enhancements can help Amobee take advantage of the growing DOOH ad spending, particularly in the United States, estimated to amount to US$2.72 billion.
Although Amobee has had a rough year, it is not the only casualty of the pandemic in the advertising industry. While it incurred huge losses in 2020, with careful planning, Amobee can bounce back and reclaim its spot as one of the largest digital marketing platforms in the world. With Singtel backing it up and its continuous efforts to innovate, Amobee can avoid another disappointing year.