Assets of defunct Adlux acquired by Excite Digital Media
Digital services company Excite Digital Media, which operates from the same Bondi Junction office as defunct search agency Adlux, acquired the assets of the collapsed company in June it has emerged, with creditors now being warned they are unlikely to receive much of the money they are owed.
The founder and chief executive of Excite Digital Media Evan Balafas told Mumbrella that he paid a “considerable” amount for the assets of the business, which was founded by George Papaioannou in 2009 and whose chief executive until June was Nicholas Stavropoulos.
The acquisition left the finan cial liabilities with Adlux. Adlux folded earlier this month owing around $3.6m to creditors, as well as undetermined amounts to the tax office.
Balafas said he also had held a minor stake in Adlux, while Papaioannou and Stavropoulos are understood to have a small holding in Excite Digital Media.
Adlux was formed in 2009 and offered services including display ad placement, search solution as well as customised toolbars for websites.
According to a report from Joubert Insolvency, which has been appointed liquidators of Adlux, creditor’s are collectively owed more than $3.5m. The largest creditor is a company called GNE Services Trust which is $1.26m out of pocket and whose business address is the same as both Adlux and Excite Digital Media.
Balafas said all Adlux’s clients had been retained following the acquisition although he admitted two advertisers had “paused” their campaigns after reports appeared yesterday of the demise of Adlux.
“I went into damage control yesterday,” he said.
Balafas declined to identify which firms had frozen their campaigns.
He also declined to disclose which brands Excite was working with but said they came from a number of categories including real estate, travel, finance and shopping.
Balafas said Adlux complemented Excite Digital Media’s business and claimed advertisers had seen significant improvement in traffic and conversions since Excite took over the campaigns.
Asked to comment on why Adlux had failed he said: “That’s a very good question. Search advertising is a bit of an art form. I don’t think the appropriate staff were in the right areas.
“You need to have the right traffic for the advertising campaigns. The traffic was not the right blend and not what advertisers were after.”
He added that some Adlux staff had been retained but that its American operation has been closed down.
Liquidator Randall Joubert told Mumbrella he had yet to receive detailed financial documents from Adlux but said it was unlikely creditors would see their cash.
Steve Jones
Declaration: Mumbrella’s parent company Focal Attractions is listed as a creditor
For legal reasons some comments on this story may not be published
The ‘moderated’ and ‘not to be published’ comments with be a good-read =)
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“Search advertising is a bit of an art form”
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If Search is an art form then Adlux is unwanted graffiti
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Advertisers, if you want art work go to Excite, otherwise nothing to see here move on.
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When did Bot traffic pass off as Art? I’m with everyone else, advertisers should stay away from this mess.
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