Blog Post

Glam Achieves Profitability; Promotes Rotolo To North American Head

For the first time in its five-year history, female-focused ad network Glam Media has moved into profitability, CEO Samir Arora told paidContent in an interview. Reflecting the company’s ability to buck recessionary pressures and the growth of its U.S. business, the company is promoting Jack Rotolo to president & general manager of its North American operations, a new position. Some executive jobs will be eliminated as part of the reorganization but Arora said no details are available yet.

By moving Rotolo, who created Glam’s original sales team, up from EVP of North American sales, Arora will be able to step back a bit. “I have been hands on managing global for the past few years,” Arora said. “We don’t have a president or COO of the company. And while we have CEOs in Japan and Germany, that level of operational delegation in other countries has not been present for us in the U.S. But in the past year, the U.S. has become a large, standalone business. … My operational responsibilities will diminish somewhat as we prepare for the next stage of the business.”

No details on that next step. But sources have told paidContent that Glam has been approached about doing a mezzanine round in preparation for a possible IPO to help promote its continued overseas expansion. A company rep confirmed that Glam has been asked about doing such a deal. Arora said only that Glam has not been seeking out such a deal. He was also mum about specific dollar figures when it came to Glam’s profits, claiming only that Q2 revenues were up 50 percent. He also declined to provide specific numbers on profits, but according to a source who has seen the books, starting EBITDA profitability will be about 5 percent, targeted to grow in 2010 to 12- to 15 percent. Glam expects profits over the long term to grow 20- to 30 percent. As for revenues, Samir sought to compare Glam’s gains to other companies’ display performance, such as Google (NSDQ: GOOG), which had only been up 3 percent in Q2, while AOL (NYSE: TWX) and Yahoo (NSDQ: YHOO) declined 30 and 14 percent, respectively.

“Glam’s Armstrong”: Some executive positions that will be eliminated as a result of Rotolo’s promotion, sources said, though Arora said no decisions have been made. He characterizes Rotolo’s position within the company as similar to the one that current AOL CEO Tim Armstrong had when he was the head of Google’s North American ad sales. As part of his move, former Scripps Interactive (NYSE: SNI) exec Alison Kennedy has been promoted to VP, sales-eastern region, and Carl Portale, former publisher of Elle Group, will head an expanded Brand Relations group.

The road to profitability: Arora says several aspects of Glam’s business enabled it to beat back the recession. For one, it sells only premium display ads and only works through ad agencies. With categories like consumer packaged goods now making a bigger shift to online ads, Glam was able to take advantage of the continued spending for select categories like women’s retail, living and food. At the same time, portals, which depended heavily on autos and finance were more vulnerable to the pullback due to the downturn. As for CPMs, Arora declined to provide numbers of what it charges, but one source who knows the company’s ad rates says Glam typically charges between $8 to $35 depending on the placement. In addition, Glam has been pushing custom sites, like AWomensWorld.com, which is a micro-site created for Frito Lay; CPMs for such sites range from $25 to $150. “We’re in categories that marketers had previously under-spent in,” Arora said. Sources close to the company told paidContent that while the company did acquire two companies in the past year, those new businesses, such as its Glam Japan unit, remain fairly small within the company.

Staffing levels: With most companies looking to lower headcount, Glam has added to its workforce despite its annual “performance-related reorganzations,” which include some layoffs last year. In all, lam employs 110 staffers in the US and 210 staffers worldwide, up from a total of 160 last year. “Every three months, we do performance reviews,” Arora said. “And every six months, we realign the company. We will evaluate a couple of positions by the end of the year, but it is not because of the economy. The company will continue to grow — mostly, the growth has come from M&As. But we also plan to start hiring in Q4. For 2010, our size will grow 10 to 20 percent in staff.” As for restoring the 50 percent salary cuts that Arora and other Glam execs took last year — another way the company achieved profitability — Arora said it’s likely those cuts will start to be undone next year.

23 Responses to “Glam Achieves Profitability; Promotes Rotolo To North American Head”

  1. Joe ? – this piece is about jack and the "new direction" for glam – glam is dog eat dog guised under "family" culture – that being said, they have succeeded on so many levels and will continue to succeed. if samir and team was so miserable, would his core people stick with him for 10+ years? give em credit where credit is due.

  2. looks like david is being fed information from an upset ex employees. As a mid level mgr at glam today, I can say that glam has performance objectives that are very clear and defined for all groups. every quarter we are asked to provide input and then the goals are set. Every quarter and every year we are asked to make sure we are focused on the right thing.

    every manager is different is style, some do formal reviews and others do not- but all groups have to do performance goals. getting to profitability was a big goal and involved all of the company pulling together.

    i have been at other companies and have to say that glam's founders really take the time to keep people empowered and motivated. morale is very high as glam is winning in the market. most of us get calls everyday to join other companies, and politely say no. Joe was drfinately side lined in the re-org and glam continues to attract top people. In hope this clears the situation.

  3. Current Employee

    Unless you faked a kidney failure or sued a coworker for some stupid thing. I don't think future employers would mind if you are fired. I say fired because when its due to performance issue, it is fired but if it is economic issue then it is laid off.

    Glam is a company like any company, the primary objective is it's responsibility to its Share Holders. First preferred share holders and then common share holders.

    Employees are not of importance since they are not even common share holders (they have options to purchase and that's it) and hence they are disposable. This is true for any company! If you don't constantly have this in the back of your mind, then ….

    Glam understands that in a down economy, it is very easy to burn through employees and they won't be able to just quit because it is difficult to find a job.

    It's not personal, it's just business.

    For those of us who are still at Glam are patiently waiting for the day of exit.

    We do not care much for our base salary reduction.

    We do not care that Samir took $5 million off the $85 million round of funding. He at least took a 50% base salary reduction along with the rest of the company.

    and when Glam exits at the end of 2010, we will be the ones happily going to the bank.

  4. What a puff piece. C'mon, if they were that close to an IPO you think top execs would be heading for the doors as they have for the past months? As a reporter you should get some sources outside of the company exec instead of reprinting all the spin he gives you.

  5. This is common practice is many firms like McKinsey. They do regular restructuring every year for 4-5% of their workforce and in a downturn of 7-8% of their employees. Contractors go first. But they also hire new people and grow almost every year. People that leave McKinsey realize that having worked their is something that shines in their CV's. So instead of kvetching about why they let you go, use that you worked there for your future job. No one cares why you were let go, only what you learned. Glam is a young company figuring it out, but the basic principles they are expounding are sound.

  6. I think Glam did what it had to do and did it with touch. A lot of companies and vcs did worse things to a lot of people during that period. You all need to grow up; if you want job security, work for IBM or Obama. If you want to grow and learn, work in Sillicon Valley for a company like Glam. Employee churn is how Sillicon Valley innovates…

    Stop over analyzing the couple hundred words in this story! Glam is an interesting company that caught everyone by surprise. It fought a war against big competitors and the economy and like in any war, someone's got to go.

    Centrs, you probably learned a lot of things while you were there. Use those to your benefit and the benefit of the web. Stop being a victim, you should be happy to have worked there.

  7. PinkShoes

    sounds like you still love glam and wish you could still work there so it must be very tough for you. potential employers will look at what you have done in the past, and certainly working at glam should help you. anyone who reads the article where it says “performance-related reorganzations" if they are hiring will read it as a combination of company, group and/or personal along with an economic downturn. david does not say or imply that glam said that you were laid off due to your personal performance reviews. glam is a business and even normal restructuring is driven economically. many companies look at teams/projects "course correct" as they grow through hyper growth.

    while you are claiming they reduced 25% of their workforce, they have grown 20% overall, so they have hired new people in other positions or projects as they have expanded. this is very typical as a company evolves from a small startup to a large media company.

    agree, its time to be done with this conversation.

  8. i've never held a grudge against glam. as early as this morning, i was telling someone what a great place it was to work and it was one of my best job experiences ever.

    i think i can speak for former and present employees. who do you think brought this article to my attention? and, they all read "performance review" the same way i did.

    i handled the layoff very graciously. i understood it was what was best for the company. i've remained friends with my coworkers and have cheered them on and congratulated them on their successes this past year.

    the ONLY problem i have is the fact that there is the insinuation that the layoffs were for cause or part of a normal "restructuring" process to eliminate underperforming projects/teams and not part of an economic or profitability strategy. if i "misread" it or misconstrued it, others will as well. it's difficult enough to find a job and REALLY difficult to explain why i was laid off. i don't need a potential employer googling glam and finding this article. i would really like to see samir clarify what he meant by performance reviews.

    if you count the people from the original layoff, all of the contractors that were laid off, plus all of the people who've been laid off month by month this past year, it equals about 25% of glam's workforce.

    call me what you will, think what you will, but i know the truth and am willing to call it when i see lies or ambiguous statements that can be damaging to myself or others.

    and, i'm done with this conversation.

  9. centrs sounds like an old employee bearing a grudge and clearly does not speak for glam employees today or in the past. She is getting upset on the word performance at a time where the US has lost 14% of jobs, and the Sequoia memo asked for 30-50% employee firings. If Glam would have followed their advice, in addition to centrs/dnse being upset, Glam would have let over 100 people go unemployed. It's time to move on, and recognize though everyone is good at some level, inclduing centrs, companies have to rank people based on theie resources, performance and needs. Tough, but if Glam was not tough to a few, they would not be around and many more lives would be hurt. Take a look at AOL and Yahoo- layoffs every few months forever with no care.

  10. I second Tr on ex employees, and perhaps present an equal typecast of a biased supporter currently working for the company. Performance reviews and reorgs have been a consistent process in an effort to maintain a strong and dedicated workforce contributing to Glam’s current focus. Layoffs are often the result of the company moving in a new direction, not necessarily tied directly to one's performance.

    In times of mass layoffs elsewhere, the salary cuts were made to keep jobs, of which the staff was thankful for. The effects of revenue based compensations are felt by ALL employees regardless of % points, but I’ve found that it has also made our team stronger, focused on surpassing goals and sharing in our successes. It’s a risk I’m willing to take in knowing that these efforts will be substantially rewarded in due time.

  11. Dog Lover 101

    “Glam has added to its workforce despite its annual “performance-related reorganzations,” which include some layoffs last year.”

    I think people are reading the sentence above incorrectly. What I am reading is that every 3 or 6 months the company rechecks how things are working, what positions people are in, etc. When I hear “performance-related reorganizations”, I read performance as “across the board” – more specifically performance OF THE COMPANY, not of an individual. As the performance of the company is examined, it is natural that things will get shifted around, and sometimes positions are added, or eliminated, or groups are moved, etc. The article to me did not in any way indicate that employees were laid off due to their particular performance. Glam has done things right in having pay cuts and not that many execs willingly do that in this environment. To those of you who have been laid off, if you were not told “you are being laid off because you are doing a bad job” or something like that, I would stop “spinning”. In my opinion the article has been misquoted and/or misunderstood. I think that if someone is laid off for performance, they probably know if. If you did not feel bad about being laid off, then clearly it was not due to your performance.

  12. the layoffs had nothing to do with growth or personal performance. we were told that the economy was bad, the ad market for 2009 was uncertain, and glam needed to pull back to focus on its core business of ad serving and shore up funds for upcoming bad times. people were asked to cut back on office supplies and travel was restricted. the execs did not voluntarily take the pay cuts and in fact were disgruntled by them. a 50% pay cut for samir would have hardly any personal impact on him. see the sequoia "gloom & doom" presentation for a playbook.

    Those "clear goals", if they included layoffs, were not communicated. Stretching the layoffs out over several weeks, driving everyone crazy with anxiety, and having a "hire fast fire fast" policy is not handling employees with care.

    It was/is a "tough tough time", so why make it tougher by saying the employees were laid off based on performance? It's like being kicked in the stomach.

  13. Ex employees airing their emotions is never easy- but I disagree. Glam had clear goals inside the company and has always handled employees and partners with care. There are clear goals inside and with growth comes people who may have been right in the past, but are not performing or their project is not performing. Kudos to Samir and their exec team for taking the larger cuts. In the meeting they announced it, they were tears by people whose jobs were saved. Good example of managing in a tough tough time.

  14. i did not make the previous comment. i am glad glam finally acheived profitability and proud and happy for my dear friends that still work there. glam mgmt. did a fantastic job of hiring smart, nice people and had a great "family" culture. that is why i am so disappointed with samir and his comments. shame on him.

  15. The only performance review that i know of when i was there is in the beginning of the year when everyone was called in to be told of their 5% to 20% pay reduction.

    Other than that, there weren't any planning, reviews or any sort. Pretty ad hoc company.

  16. as someone that was laid off from glam along with many many others, my jaw dropped when i saw this story. perhaps the ONLY people laid off for performance were salespeople not making their numbers.

    the individual contributions of those laid off helped glam get to where it is today. they are outstanding people and hugely talented and i consider myself in good company.

    i never felt bad about being laid off until today.

  17. I see that Glam rallied all of their bloggers to comment per usual.

    I am shocked by the claim that the layoffs were due to performance evaluations. Anyone with knowledge of the situation knows this is absolutely not the case, and also knows how close to the edge this company came. I understand they have a story to spin, but to make an allegation like that in this economy is cruel and irresponsible.

  18. @roger,

    I think your facts are not correct — classmates.com at 14m is not and don't think it has ever been a part of the Glam network. Glam doesn't have large publishers, of the over 100m in reach, the largest is women's forum that is 6m visitors. Glam is really a large network of small, tiny publishers – over 1,500. This is their power and why they are different than rep firms like Federated Media. With such a wide but built using small sites network they use technology to provide ads with the scale of Yahoo or AOL as portals. They sound like a Google AdSense for display based on jj's comments of their virtuous cycle.

  19. They continue to reduce guarantees and that is helping their bottom line after years of non-ecconomic deals. It will be very interesting to see if they can keep their publishers as they see checks lower. Still have almost 14mm UVs coming from classmates.com. Always surprises me that so few people seem to care about the site quality in this network. Some good, lots of mediocre sites.

  20. Glam has always been able to deliver on what they promised. Thought their payout on non-Beauty and non-Entertainment channels has been decreasing.

    Instead of re-instating the pay cut, i firmly believe all employee should take additional pay cut in exchange for more equity in the company. In which, the profitability achieved through opex reduction is able to propel Glam towards an IPO or M&A. This would show how much the company is will to pull together behind a strong leader and an excellent company.

  21. As a publisher, glam is unlike any other company we've done business with. Yes, we LOVE the money they make for us, but they always provide a whole lot more. They do not get enough credit for what they have done — bringing top brands to small sites. Before glam it was always understood that big equals good quality — like you get in Vogue or In Style. But the web has changed that. Just because we are small and not a big magazine or tv network, does not mean we are not read and influential. Just like google did for web masters for search, glam is doing for us niche publishers. The more they grow, the more we grow. The more we grow, the more they grow.

  22. This is very good news for Glam and for the industry. Revenue growth in a downturn, managing operating expenses and reaching profitability are signs of a solid company.

    It will be interesting to see How Glam evolves, privately and as a public company through an IPO. They have certainly stirred the traditional media companies position, taking the #1 spot from iVillage and Hearst. Their model is clever.