Which Ad Networks Will Go Bankrupt Next

2016 has been a crazy year with the growth of header bidding, ad block usage and the drop in Google’s share of publishers’ ad inventories. Things have definitely been shaken up last year and as a result two major bankruptcies have occurred. While Say Media technically isn’t bankrupt, they seem pretty close according to many publishers that used to run them and still have not been paid by them. Mode Media used to be worth over $1 billion and is now bankrupt. Publishers are unsure if they’ll ever receive a penny from Mode Media’s unpaid ad revenues.

What is the common theme of these two bankruptcies? Both companies failed to adapt to the industry and adopt header bidding. As a result, they are now in the header bidding graveyard. Both bankruptcies have been very painful to many publishers because they lost huge sums of unpaid ad revenues. Unfortunately, these two bankruptcies are not the last ones either. We expect there to be more bankruptcies in 2017. Below are the most likely ad networks that will go bankrupt in 2017:

 

  1. Matomy

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A few years back, Matomy was fairly strong running a combination of IBV and unique demand. They would be quite aggressive with their flat CPMs and 100% fill tags which was great for publishers. As their ability to generate profits on those tags decreased, they slowly decreased the demand that they would run. As a result, the company seems to have downsized significantly compared to several years back.

With the emergence of header bidding and the lack of Matomy’s participation, this downward trend shall continue. Similar Israeli ad networks have surpassed Matomy over the years and have thrived with header bidding like Sekindo and 152 Media. Matomy has failed to take advantage of the header bidding evolution in the industry which could very well be the last nail in the coffin for Matomy. If you’d like to replace Matomy with an ad network that performs well and is header bid compatible, check-out Sovrn.

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If you are running Matomy, make sure you do not have long payment terms. If they end up going bankrupt and not paying out their ad revenues, net 60 vs. net 30 payment terms would be a lot larger loss for your business. We recommend if Matomy tries to extend their payment terms or is late on any payments, pause them immediately. You do not want to drag even more revenues down the drain.

  1. Sonobi

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Sonobi has been known as one of the most deceptive ad networks or supply side platforms (SSPs) in the industry. As a result, publisher trust and loyalty has been very low. Although Sonobi has been relatively early into the header bidding game, their header bidding technology is still very low quality. Their on-page header bid solution (HBS), Morpheus, is one of the worst header bid solutions in the industry. Many publishers have reported broken pages, spiked page load times, broken JS elements on the page, non-optimal DFP setups and sometimes even lower revenues versus not running header bidding at all. Bottom line, do not run Sonobi’s HBS directly on-page. If you do run them, run them via a header container and run their newer adapter (They will try to push you to run the old adapter that is less optimal for publishers but it gives Sonobi an unfair advantage in the header bid auction).

As more ad networks have become header bid compatible, Sonobi has become less competitive. Many publishers have reported dropping win rates as 2016 progressed. We have not seen any innovations on Sonobi’s side to reverse this trend. As publishers become more header bid savvy, they will drop the header bid partners that do not have high enough win rates. In most cases, Sonobi will be part of that group.

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If you decide to take the risk on Sonobi, only run their header bid demand via a header container. Do not run their standard ad tags or their on-page header bid solution. Both will lose you money versus running an optimal header container. Make sure to negotiate tight payment terms with Sonobi. If they end up going bankrupt, you don’t want to end up with 3 months unpaid ad revenues. Make sure they pay on-time as well. If they start missing payment deadlines, it means they are having cash flow issues which is the first major sign of impending bankruptcy.

  1. Totally Her

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Totally Her was known as one of Mode Media’s main competitors. They had a very similar business model especially in the early days. Both were representative ad networks that would run a lot of direct sales deals, focus on the female demographic, charge really high revenue shares (~50%), have very strict contract stipulations and have long payment terms. It’s an understatement to say Totally Her is not publisher friendly and the reason they were competitive at one point was because of the unique demand they were able to bring.

As we head into January, the worst seasonal month of the year, Totally Her is really going to feel the squeeze. Direct sales is already dying and companies like Totally Her feel that the most. The direct sales budgets are moving towards programmatic buys via DSPs rather than more archaic methods of purchasing media like buying through Totally Her to get access to publisher inventory.

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The biggest reason why Totally Her will eventually fold is because their lack of innovation and technology focus. They still have one of the worst reporting interfaces in the industry and it’s clear by looking at the executive team that they will never be a technology focused company. There is a very low chance that Totally Her will be able to adapt and catch up with their competitors and will most likely see a similar fate to their old competitor, Mode Media.

Running Totally Her is even more risky because of their long payment terms. That’s part of the reason Mode Media was so devastating for so many publishers, because their payment terms were so long and then they were late on payments. Some publishers lost over 6 months worth of ad revenue!  Do not let this happen to you. If Totally Her still performs well for you, consider reducing their volume to send more impressions to header bidding. If you don’t have header bidding implemented yet, make sure to implement ASAP. Once you have an optimal header bid setup, you’ll have no need to run Totally Her. Otherwise, proceed with caution. Totally Her could very well be the next ad network to tank and be your next write-off.

  1. Rubicon

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Rubicon has been the first to publically admit that their dropping company performance is due to them adopting header bidding too late. Since that first large drop in stock prices and layoff, their stock prices continue to drop and doesn’t seem to be settling down as we approach the lowest seasonal month of the year. Their executive team are leaving the company in mass exodus as well.

Rubicon’s days seem to be numbered. It has helped for them to become header bid compatible but they still lack unique demand and competitive advantages. Other header bid partners surpass them in win rates and overall won ad revenues and that gap seems to continue to rise. The majority of Rubicon’s most valuable talent has already left and the rest should be leaving soon. Expect a slow decline of stock prices over 2017.

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If you’re running Rubicon, make sure it is only via header bidding. Do not run their managed demand tags because they don’t add value to your ad inventory and are especially not worth it if Rubicon eventually goes bankrupt and does not pay out. Rubicon made a recent desperate effort to increase profits by charging $0.10 CPMs on ad requests. Now Rubicon has had some horrible contract stipulations but this one of the worst we’ve ever seen. If Rubicon tries to pull this maneuver on your business, reject it immediately. They will not hold firm. Check your invoices in January as well because they may try to sneak it in.  Watch the payout deadlines from Rubicon very closely. If they are late on any payments, we’d recommend to stop their demand immediately. This is the first major sign of bankruptcy. You don’t want to lose out on more unpaid ad revenues.

  1. Pubmatic

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Pubmatic has been drowning in mediocrity for years now. From all the publishers that we spoke with that have run Pubmatic, we get the same underlining feedback:

  • Very strong promises
  • Underwhelming performance
  • Horrible support
  • Mediocre technology
  • No unique demand
  • Header bidding demand has very low win rates
  • Lack of innovation

The only positive feedback we heard from publishers is that they are header bid compatible, however, if they are not winning many ad impressions, then they are not worth including in the header bid stack. As more ad networks become header bid compatible, more publishers will exclude Pubmatic from their ad inventories. 2016 saw a large layoff from Pubmatic and expect more to come. The future of Pubmatic does not look bright.

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The only way it would be worth taking the risk to continue to run Pubmatic is via header bidding. Running their standard tags is not worth the risk of eventually not getting paid for these ad impressions since Pubmatic standard tags perform horribly. If you don’t have a header container yet, get one setup immediately if you have a large developer team or get header bidding implemented for you then pause all Pubmatic standard tags. If you are running a header container, then it would be worth including Pubmatic if they get win rates above 5%. Watch their payout schedule very closely though. As soon as they’re late, it’s time to drop them. This could be a sign that they are going out of business.

 

  1. Tribal Fusion (Exponential)

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Of all 6 ad networks mentioned, Tribal Fusion is the most likely ad network to go out of business. We have seen the same signals with Tribal Fusion as we saw with Say Media and Mode Media:

  • Arrogant approach that publishers are lucky to run their demand
  • Horrible support makes them difficult to work with
  • Use of deceptive strategies to trick publishers into non-optimal setups
  • Long payment terms
  • Technology from the stone ages
  • High revenue share and a dependency on direct sales
  • Narrow minded executive team that has zero plans of becoming header bid compatible
  • Dropping performance that is becoming less competitive every year
  • Lack of trust from publishers

The outlook for Tribal Fusion is looking quite dreary. They are heading into the worse seasonal month, direct sales is dying, they have no plans on becoming header bid compatible, their advertisers are moving their budgets to platforms that can facilitate private marketplace buys (PMPs) and loyalty from their publishers is minimal. As more publishers implement header bidding, they will drop Tribal Fusion from their ad stack. Tribal Fusion will no longer get away with tricking publishers into running their ad tags directly on page, calling their platform an “ad server” and then running any ad impressions they don’t buy as passbacks to other ad networks. Publishers are leaving too much money on the table with that setup.

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Normally we would say to run these risky ad networks with caution, however, Tribal Fusion is by far the riskiest. If you are running Tribal Fusion, we would recommend pausing them immediately and letting your AdX and header bidding demand replace that portion of your ad inventory. You will get less passback impressions which will improve your site performance and you won’t be stuck with unpaid ad revenues. With such long payment terms and very little if any boost in ad revenues when including them in your ad inventory, we’d recommend dropping Tribal Fusion from your ad inventory to be safe rather than sorry.

 

Last Words

A big reason in this increase in major ad network bankruptcy is because the volatility and innovation in the ad tech industry. It has never been higher in the history of the industry and expect it to continue to accelerate in 2017. That means more ad networks will be left by the wayside and will eventually end up in the header bid graveyard with Mode Media and Say Media.

We’ve seen the horrible effects to publishers from unpaid ad revenues due to ad network bankruptcy. Don’t let this happen to you! Diversify your ad revenues. The best way to do this is to implement header bidding via a header container and run an optimal auction free of passbacks. Once implemented, it’s easy to add or drop new ad networks. With a header bidding setup, you can earn higher ad revenues while also avoiding the riskiest ad networks that we mentioned above.

If you would like advice how to implement header bidding, you can contact us here. Also, feel free to contact us if you have not been paid by Mode Media. We might be able to help. More ad networks will go bankrupt. Be smart and protect your business so you don’t lose a huge portion of your ad revenues overnight in 2017. If you are looking to replace some of these ad networks with higher value ad networks, than check out our top 20 list here.

Comments

  1. Peter Gibbons says:

    The amount of disinformation here is astounding. Seems like pure libel with a touch of pushing your own agenda.

  2. MonetizePros says:

    Please explain what specifically is the disinformation in your opinion. Our agenda is to inform publishers of the potential threat of certain ad networks going out of business like what happened with Mode Media. What do you believe is our agenda?

  3. Tim Hussain says:

    Either the people who wrote this are shamelessly manipulating all the causes of these company’s issues to support services they are trying to sell (disgraceful if you are – just like Donald trump), or you have such a low level of knowledge of online advertising, and these companies and the complicated and multi-faceted causes of their decline that you appear as complete amateurs in your hypothesis.

  4. Emmanuel Probst says:

    Of the hundreds if not thousands of articles I read in a year, this one is from far the most straightforward. One can’t blame you for sugar-coating anything for sure. I’ll keep an eye on your predictions. In the meantime, would love to connect with you on LinkedIn…A shame you didn’t sign the article…Afraid of something?

  5. Ridiculous article. I know for a fact that one of the companies you mention has just had its best year in business, is cashflow positive and making a healthy profit. Where exactly do you get financial information on privately owned companies? Pluck it out of your ass it seems. I agree that it’s borderline libel, instilling fear that financially healthy companies may go under. Why don’t you go work for mail online where click bait crap is accepted?

  6. Tim Hussain says:

    Wow. You deleted my comment from night. You really do operate like trump policitics. Ignoring views you dislike. Shame on you. My views were neither offensive or extreme.

  7. Ben Zonah says:

    I’m sure most of these companies can still afford lawyers. Good luck with that.

  8. John morofka says:

    Lots of self-serving disinformation. There seems to some kind of agenda to make header bidding seem like some wonder solution.

    Header bidding is not going to protect the publisher from anything. If you want demand you need relationships with demand providers. They bring advertisers to you site. Their payment terms are based on when they get paid by advertisers. Evaluate a vendor by their demand quality and the reliability of their payments. I know some of the vendors above that have never ever been late in their payments in the 10+ years we have worked with them.

    How is header bidding going to protect you from a vendor who goes out of business? By making it easier to switch them out? It is trivial to remove a vendor using any adServer. Also header bidding is a duct tape auction that happens in the browser. No one is responsible for the auction and a vendor can submit a high bid and win, but pay a low price at payment time. There is no ability to audit. We are already seeing this kind of fraud.

    Seems to me you threw a number of companies under the bus to push some misinformation on header bidding.

  9. Mikkel Hansen says:

    I don’t like the tone of this article one bit.

    You guys choose to shamelessly dump an ad to your own header bidding solution in an article that slams other monetisation channels. I don’t know if it’s libel, but it’s pretty disgusting.

    Now where’s that BS button?

  10. MonetizePros says:

    Hi Tim, thank you for expressing your opinion. I’m not sure why you decided to include politics but this article is created to warn publishers of ad networks that have shown warning signs of going out of business. While our information is not perfect because we don’t work in any of these companies, we have received the warning sign information from the many large publishers that we communicate with.

  11. MonetizePros says:

    Hi Lynsey, please share which company you are referring to. This is an important discussion to be had for publishers who depend on getting paid from each of the ad networks they are partnered with. We got the information from the many large publishers that we communicate with on a regular basis.

  12. MonetizePros says:

    Hi Mikkel, I’m a bit confused. We don’t own a header bid solution. We provide monetization related content for publishers. However, we strongly believe header bidding is the future of ad operations. Perhaps you don’t agree on the ad networks we chose but do you disagree that there will be more ad networks that will go out of business in 2017?

  13. MonetizePros says:

    Hi John, thank you for elaborating. We do believe header bidding is the future of ad operations and it is more than a duct tape solution. With the right technology, you can audit revenue numbers on the fly with header bidding. Ad networks that are not following the header bidding trend have been shown to be left behind and lost business as a result.

    It seems you have had a bad experience with header bidding so far. This is understandable with the many options out there that can vary from low to high quality. Would you mind sharing which header bid solution you have tried?

    I would like to congratulate you on finding these reliable ad networks that have not been late in payments for 10+ years. Could you share those ad networks so our publishers can benefit from that knowledge? Thanks 🙂

  14. MonetizePros says:

    Nope, we just approved your comments. Don’t worry, we are working on building bridges not walls 😉

  15. John morofka says:

    We have worked with all these vendors for different clients. We have worked with tribal fusion (exponential) since 2004 and they have been a stellar partner. They have reputable ads and pay well and on time. We just talked to our rep yesterday. However, they are picky and don’t work with every website we bring them. We also are actively working with the other vendors and they have also been valuable demand partners.

    More importantly, we have implemented header bidding for several publishers and it has its benefits and disadvantages. It primarily is a way to increase yield via adding additional demand partners to a pre-auction before it goes to adx. However, it also has negatives, and with time we are finding it is also being gamed by vendors.

    Header bidding has its place, but the misinformation in this article is not helpful.

  16. MaximumLLoyd says:

    Your forgot a whole lot more… any time someone is looking for buyer they are looking to sell before it all goes to Sh+t. – I have to concur with your message – tho some will say its all lies, but isn’t that what every business says before closing? (Ok Future Stores except). For those who can’t seem to figure it out who is MonetizePros… just look it up for god’s sake… In the end advertising – not direct response buy buy buy – but Advertising in the Display world is not 1’s and 0’s. Advertising creatives are not currency or stocks. They are exactlly like the show Mad Men portray, what makes one do something, what makes someone identify with a product, what makes a product a need and want. Case in point – Marlboro was geared to women, that failed so the agency roll up it sleves, made the open box concept and sold it to working class males. So you see it advertising is Human not Machine. The glory years of Digital Media are currently behind them and now the culling of the heard begins. So they will only be Google, Facebook, Adobe, Verizon, CHINA, and the Holding Companies… get used to it. Now those who look at us old timers when we talk about the bubble bursting in 2000 will understand the miles of sh+t river we have had row thru. Best LLoyd

  17. Show me where the bad Exponential touched you on this doll 🙁

    Disinformation plus, you have absolutely no idea what you are talking about!

  18. John Black says:

    As a publisher working with 5 of the companies on this list over the past 3 years, have to say that a lot of the observations here are shockingly on point and similar to what we’ve assumed but could never be quite sure of. Sonobi will push you to give them an unfair advantage, and DFP reps will confirm this. Pubmatic tags and inventory are poor. Tribal is quite arrogant and outdated. Don’t have any insight into the financial situations of any of these firms but we’ll be taking some advice to heart given how we’ve seen these observations play out over time.

  19. Could you post an article about what is the best way to innovate in this space? Who is doing it well in your opinion?

  20. I have been running a website and monetizing and managing traffic on other sites as well. I have moved over to header bidding in a big way last year and have experienced a doubling of my revenue. That is right a doubling. I have developed new techniques with header bidding that are not being used in the industry yet to achieve this type of revenue. My revenue per 1000 page views (RPM), depending on the site and number of ads per page ranges from 5.00 to 10.00. We are also starting to refresh the ads on the header bidder and achieving an addition double of revenue again. My site produced 20.00 plus RPMs during the 4th quarter. I appreciate this article and have worked with two of the firms mentioned above. I left one of them early last year because of warning signs and I will be leaving the other today. If you have every had an agency go bankrupt on you, it is a sick feeling. Thank you for the great resource and information that you provide on your site and blog. Keep up the great work.

  21. MonetizePros says:

    Hi Mike, congratulations on your success on header bidding! Many publishers have seen similar success and it’s great to hear about publishers like yourself that are achieving great levels of innovation. There are many publishers that can only strive to be at your level. Bravo!

  22. MonetizePros says:

    Hi Jane, I’m glad you asked. We recently posted an article that list the top AdSense alternatives of 2017:

    https://monetizepros.com/display-advertising-tips/adsense-alternatives-2017/

    An important criteria we used was innovation.

  23. MonetizePros says:

    Hi John, yes that is the consistent feedback we’ve received from the many large publishers we speak to. These issues that each ad network have are derived from a lack of long term focus. I’m afraid this will hurt the long term health of each ad network as the industry becomes more efficient and consolidates.

  24. MonetizePros says:

    Hi Grizzle, I have to say I definitely laughed after that comment.

    The information came directly from very large publishers that have worked with each of the 7 ad networks that were mentioned. It’s pretty clear the majority of the bad comments are from employees of each of the ad networks mentioned using their personal emails. I am not surprised that you are angry but I thank you for expressing your opinion. Do you at least agree that there will be more ad networks that will go out of business in 2017?

  25. MonetizePros says:

    Thank you for that insightful comment Lloyd. It’s clear there is a shift happening in the ad industry and ad networks will go out of business as a result and the industry will consolidate over time.

  26. MonetizePros says:

    Hi John, thank you for your feedback on Tribal Fusion. It’s good to hear you had a positive experience about Tribal Fusion because we didn’t hear many from the publishers that we speak with. What other vendors have you worked with as well?

    How is header bidding getting gamed by vendors? Which vendors exactly?

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