Hopes that Oracle’s advertising division will survive under new ownership are fading fast. The company’s management has no interest in selling. They’ve finished advertising and it’s just the management that will face the consequences.
Digiday understands that Oracle’s advertising closure will involve hundreds of job cuts, with most employees finding out about the plans when they were announced during the company’s most recent earnings call earlier this month.
The layoffs actually began last week, with Digiday’s sources saying that many of the affected employees weren’t informed of the decision to close the division until the company’s earnings call on June 11, leaving only a skeleton crew who received layoff notice just two weeks before.
By then, Oracle will have laid off 900 executives, but with ad tech CEOs already scouting for talent at the Cannes Lions festival last week, they may not have to look far for new opportunities.
“There is a place for those people in the business, even if there aren’t necessarily roles here for them,” one senior ad tech executive was overheard saying at the festival.
Oracle’s media relations team did not respond to Digiday’s request for comment by press time.
Integral Ad Science is one of the companies poised for a restructuring: The ad verification company was once reportedly in contention to buy Oracle’s ad business and has already begun courting fired executives, according to Ad Age.
In fact, on June 13th, the Integral Ad Science team issued a warning to all those affected by Oracle’s closure of its ad tech business (both clients and staff) in the form of a blog post titled “An Easy Transition to IAS…”
The rush to siphon off stranded talent from Oracle’s advertising business shows just how fed up the tech giant’s management is with a division that made $2 billion just two years ago. They’d rather shut it down and save on taxes than sell it and make a little money. We emphasize “a little,” because after years of neglect, Oracle’s advertising business is not in a position to thrive under new ownership.
“Even if Oracle were able to find a buyer for its assets, it is unlikely there would be any value left given IAS’s assets have lost value. [Integral Ad Science] “DoubleVerify appears to have a large portion of the market,” said Tom Triscali, an adviser to investment firm Landmark Ventures.
There were also privacy risks to be had given the data assets involved, and another source with contacts inside the organization said those concerns ultimately solidified the decision to close the unit.
Privacy concerns have been a thorn in Oracle’s side since 2018, following the Cambridge Analytica scandal that saw Facebook cut off certain data deals with companies like Oracle. By 2020, Oracle had shut down AddThis due to GDPR and stopped offering third-party data targeting services across Europe. Two years ago, it faced a class action lawsuit for using third-party trackers without consent to build profiles.
With a track record like this, who knows what other surprises it might have in store for a potential new owner?
Richie Glasberg, CEO of startup SafeGuard Privacy and a longtime industry executive, noted that privacy requirements in the U.S. have become increasingly complex, and added that while the advertising industry is lobbying for federal guidelines that would override state laws, nationwide guidelines may still be a while away.
“Advertising has been a (largely) unregulated business for a long time,” he said, noting that many of the privacy laws now have “effective force” and companies risk billions of dollars in fines if they are found to be in violation of such laws. “Now that regulation is in place, companies need to seriously consider what products and data they have, the legal position of how they collect it, and who they share it with.”
Whether it’s privacy issues or a struggling advertising division, Oracle is unlikely to ever recoup its investment, if it ever does — a stain on its history that the CEO wants to avoid at all costs.
“The CEO of Oracle doesn’t want to take away Mark,” one ad tech executive said on the sidelines of the Cannes Lions festival last week. “They don’t want articles to be written that say they bought these assets for $X amount and sold them for $100 million. If they don’t take away Mark, it’s as if nothing happened.”
Oracles, in literature and in life, are famous for their prophecies, but this one predicted that the cost of owning an advertising business would exceed its actual value — a bitter pill to swallow for any hopeful buyer.
“if [Oracle’s brand safety tool and contextual targeting business] “If Grapeshot was for sale we would try to acquire it even though it was a lot larger than our business,” said the CEO of an ad tech company, who spoke on the condition of anonymity to be candid.
But the reality is, Oracle isn’t selling. All that’s left now is a lot of accounts that will soon be out of service. Oracle’s loss will be someone else’s gain.
“We’re currently searching for our next moat,” said an ad tech executive who spoke on the condition of anonymity to discuss the matter candidly. “Now that this has happened, we have to find a new ad verification partner.”
