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paidContent.org - Earnings: ValueClick Profits Down 30 Percent, But Display Steals Lead Gen Dollars

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David Kaplan
paidContent.org
Tuesday, May 5, 2009; 6:07 PM

Online ad company ValueClick cited the usual economic woes as Q1 net income tumbled 30 percent to $13.2 million ($0.15 per share) as revenues slid 20 percent to $135 million.

In a statement, Tom Vadnais, ValueClick's CEO, tried to put as bright a sheen on the results as possible. Striking a somewhat defensive posture, he said that if it weren't for the company's concentration on performance-based marketing and cost-cutting, things would have been worse. In the area of display, ValueClick's results often offer a microcosm of that business, which has taken a beating in general for the past year. Display beat expectations, gaining 2 percent to $34 million. While not earth-shattering, it's another sign that display might have hit bottom and may rise slowly. During the call, Vadnais noted that lead gen marketing, which makes up the other half of its media segment was down 20 percent, as spending migrated to display. More from the call after the jump

Earnings release | Webcast (4:30 PM EDT)

?Outlook: As for the current quarter, Q2 isn't trending that strong either: revenue is expected to come in under $130 million, while net income is looking slightly down sequentially as well. On a per share basis, profit is anticipated to come in below $0.14 per share.

?Shoring up display: During the Q&A, Vadnais was asked about how strong display looks. "We're in the performance-based segment and we're working with our publishers on better targeting. That's why we're doing better than portals and higher-end sites." He expects that adding three vertical vertical networks on top of the one ValueClick (NSDQ: VCLK) currently offers are designed to help shore up display. Vadnais was pushed on what sort of CPMs ValueClick is seeing for targeted display, but he declined to provide numbers. "It's variable, we don't have a rate card," he said. "It's more important to focus on the ROI going out as opposed to the prices being paid going in."

?Lead gen decline: Past regulatory problems have continued to keep marketers and publishers away from lead gen. Vadnais says "we'd like to see it come back," but ValueClick's sales force is not making a concerted effort to push one versus the other.


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