- Stock prices are falling for many online advertising companies, despite overall global spending on online advertising expected to grow 25% this year.
- Smaller publicly traded online ad firms are struggling like Rocketfuel,— down 73% since Jan; YuMe, —down 38%; and Tremor Video — down 46%.
- Operational costs like upgrading to automated platforms is largely to blame for the failure to benefit from growing ad sales —and competition from web giants like Google also complicates matters.
Online advertising is in a growing pains phase. Once automated solutions are put into place, the cost of maintaining the platforms will level out, and the smaller firms can enjoy growing revenues. It is likely some of the smaller firms won't be able to recover, as larger firms continue to dominate the market. Some will ride the storm out and experience success, but it will take some time.