Google ad tech switch craters Enero’s OBMedia
Enero’s OBMedia is cutting staff and pulling out $7m in cost after a Google ad tech change cratered its performance media business, according to an ASX filing.
The Australian agency group informed the market that FY25 revenue at US-based OBMedia would be down up to 39% because of Google’s move from the Adsense for Domains (AFD) ad tech to Related Search on Content (RSOC).
The filing said that OBMedia had been testing RSOC and may create additional revenue opportunities in future. However, it was not a replacement for AFD in the short term.
“To prudently manage expenses during this transitionary period, OBMedia will be undertaking staff reductions in FY25 Q4. The initial change actioned this week will remove around $7m of annual cost from the OBMedia business whilst retaining its key strategic capabilities.”
The group has been trying to sell OBMedia from last year, and has experienced significant challenges across the board. This article from Mumbrella’s Tim Burrowes runs through the history of Australia’s only homegrown agency holding company, from its beginnings as Photon to the exodus of senior leadership last year.
OBMedia has been an underforming part of the business for some time. It’s model involves search traffic arbitrage, an area where multiple network layers obscure transparency and players are incentivised to manufacture traffic.
The ASX filing noted that Enero is expecting an overall net revenue decline of 10-12% and a steeper EBITDA hit of between 30-40%.
The agency group was founded in Australia as Photon in 2000, changing its name to Enero in 2012 . It now operates in the US, UK and Europe. It’s key agencies include Hotwire, OBMedia, BMF and Orchard.
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What? No mention of AI in the release? Thought that was obligatory these days.
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