As Oracle’s ad business collapses, layoffs and uncertainty ripple through the industry

The layoffs actually started last week — many of the impacted workers were not informed of the decision to close the unit until the corporation’s June 11 earnings call, according to one Digiday source — leaving a skeleton crew with just two weeks’ notice before they’re also gone. 

By then, Oracle will have axed 900 execs. However, many might not have to search far for new opportunities, as ad tech CEOs were already scouting talent during the Cannes Lions festival last week.

“Even if there’s not necessarily a role for them here, you find space in a business for people like that,” one senior ad tech exec 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 firm that’s ready to pick up the pieces. The ad verification company was reportedly in contention to buy Oracle’s ad business at one point, per Ad Age, and has already started reaching out to the laid-off execs.

In fact, on June 13, the Integral Ad Science team lit a beacon, aimed at all those impacted by the closure of Oracle’s ad tech operations (both clients and staffers alike) in the guise of a blog post, entitled “Transition with ease to IAS…”

The scramble to hoover up the people left behind by Oracle’s ad business shows just how fed up the tech giant’s bosses had become with a division that raked in $2 billion only two years ago; they’d rather save on taxes by shutting it down than make a bit of money from selling it. Emphasis on “bit,” because Oracle’s ad business, neglected for years, isn’t exactly in shape to thrive under new ownership.

“Even if Oracle was able to find a buyer for the assets, it’s hard to imagine if there’s any value left in them, given that IAS [Integral Ad Science] and DoubleVerify seem to have taken the majority of the market,” noted Tom Triscari, an advisor to investment firm Landmark Ventures.

Plus, it comes with privacy risks given its data assets — separate sources with contacts inside the organization claimed such concerns, ultimately, sealed the decision to close down the unit.

Privacy concerns have been a thorn in Oracle’s side since 2018, following the Cambridge Analytica scandal when Facebook cut certain data deals with companies like Oracle. By 2020, Oracle had shut down AddThis and ceased offering third-party data targeting services across Europe due to GDPR. Two years ago, it faced a class action lawsuit for allegedly using third-party trackers without consent to build profiles.

With a track record like this, who knows what other surprises might be lurking for any prospective new owner?

Richy Glassberg, CEO of startup SafeGuard Privacy and longtime industry exec, noted the growing complexities of U.S. privacy requirements — the ad industry is lobbying for federal guidelines with primacy over state laws — adding national guidelines could be some way off.

“Advertising has been an unregulated business (for the most part) for a long time,” he said, noting how many privacy laws now “have real teeth,” with companies risking billions in fines if they are found to be in breach of such laws. “Now we’re regulated, you have to take a real hard look at what products and data you have, and the legal standing of how you collect it, plus who you’re sharing it with.”

Whether it’s the privacy issues or its ad division’s poor state, Oracle’s chances of recouping much — if anything — on what it invested are slim. That’s the kind of mark in history CEOs try to avoid at all costs.

“Oracle’s CEO doesn’t want to take the mark,” said an ad tech exec on the sidelines of the Cannes Lions festival last week. “They don’t want the story to be written that they bought these assets for X billion of dollars and sold them for a hundred million dollars. If you never take the mark then it never happened.”

In both literature and life, oracles are famed for their prophecies, and this one predicted that the cost of owning an ad business outweighed its actual value. A bitter pill for any hopeful buyers.

“If [Oracle’s brand safety tool and contextual targeting business] Grapeshot were for sale then we would try to buy it even if it’s significantly larger than our business,” said a CEO of an ad tech business, who exchanged anonymity for candor.

But the fact is, Oracle isn’t selling. All that’s left now are a lot of soon-to-be unserviced accounts. Oracle’s loss will be someone else’s gain.

“We’re now on the hunt to find the next Moat,” said an ad tech exec, who also exchanged anonymity for candor on the matter. “I have to find a new ad verification partner now that this has happened.”