ValueClick stock tanks 18 percent on missed earnings: Is the ad recession on?
ValueClick preannounced their second-quarter earnings early today, reporting revenue between $163 milllion and $164 million, below the online-advertising company's expectations of $166 million to $170 milllion. As of this morning, company shares are down 18.52 percent. In a release, ValueClick CEO Tom Vadnais blamed a "increasing macroeconomic uncertainty" which the company said "negatively impacted revenue in the quarter, primarily in the U.S. comparison shopping and U.S. display advertising businesses." But are we in an ad recession, or did ValueClick whiff their quarter and need an excuse?
A competitor tells us: "It's definitely a tougher environment. It's been a tough quarter for all of us." But he reminds us the economy is only part of ValueClick's problems. Historically, ValueClick earned much of its revenues from the kind of sketchy lead-generation advertising (think "click here, win this") that led the FTC to accuse the company of violating antispam laws. In February, ValueClick settled with the FTC, agreeing to pay out $2.9 million. After that, says the competitor, "There probably was a lot of client turnover." As a result, its lead-generation business is down over 20 percent in the last year — and ValueClick's reporting its second-quarter earnings 14 days early.