Mobile ad tech platform Millennial Media reported fourth-quarter and year-end earnings on Monday – with revenues down in Q4 but up from 2013’s full-year total.
Q4 2014 revenue dipped to $86.4 million from $96.7 million in Q4 2013, while year-end revenue rose from $259.2 million in 2013 to $296.2 million in 2014. Read the earnings release.
Millennial Media has trumpeted its programmatic road map since CEO Michael Barrett joined the firm a year ago. This strategy gained speed in 2014 thanks in part to its acquisition of Nexage, completed in December. But the company struggled throughout the year to revive its anemic managed media business.
The dip in Millennial’s managed service business in 2014 was due, in part, to client losses, compounded by the company’s “challenging” direct response business, according to Barrett.
Yet with the ink dry on its Nexage buy and thanks to the addition of several key hires, Barrett said Millennial Media is poised to grow in 2015.
“Through these accomplishments, we’ve entered 2015 with a stronger, more complete set of tools to help us execute on our full-stack marketplace vision and make mobile simple for our partners,” Barrett said in a statement. “We’ve already begun inventory integrations to our owned-and-operated programmatic exchange, The Millennial Media Exchange powered by Nexage.”
During a call with investors, Barrett said the Nexage integration was proceeding ahead of schedule.
“We are seeing early signs of progress with better flow rates and eCPMs in the exchange as we bring new supply and demand sources,” he said. “We feel that we now have the assets, the people and the organization in place to accelerate our overall revenue growth once again.”
Millennial Media’s managed media business makes up the bulk of the firm’s revenue. This unit is a full-service insertion order business for agencies and advertisers.
The company tapped former Sociomantic CEO Jason Kelly in October to spearhead the underperforming division.
Kelly was charged with accelerating revenue growth in the firm’s full-service business and developing the capacity for publishers and advertisers to transact programmatically.
By year’s end, Barrett said, that aim had progressed. ”Supported by the foundation of our managed media business, we expect to accelerate our programmatic platform capabilities and revenue production during 2015,” he said.
The second crucial piece of Millennial’s business is its programmatic platform, led by Millennial supply-side vet Matt Gillis.
Millennial Media predicts that, with the Nexage acquisition complete, revenue for its platform business will grow almost 200% for the full year. But during the call, investors wanted to know how exactly this would happen.
Barrett explained that the combination of Millennial Media’s supply footprint and Nexage’s monetization capabilities was already paying off, and that the overall growth of the industry as it adopts programmatic should help create the growth rates Millennial has signaled for the year.
“As we transition the inventory over to the platform, it is actually exceeding expectations in terms of what we’re seeing from monetization,” he said. “Albeit it’s early days in terms of the transition of the inventory, but we’re very confident in the assessment that we had of Nexage and very hopeful that the growth rates we’ve projected are in line with the expectations we have internally.”