The affiliate marketing provider has reported a 34.7 per cent drop in revenue for H1.
Cyprus.- Affiliate marketing services provider XLMedia has reported a year-on-year drop in revenue and net profit due to the impact of Covid-19 and Google’s demotion of several of its websites.
Revenue for the six months ending June 30 fell 34.7 per cent year-on-year to $27.7m
XLMedia saw several of its websites manually demoted by Google in January. The company warned at the time that the decision would lead to a significant decrease in traffic to its sites.
The company has now revealed that the penalty has hit revenue by around $2m a month since March.
XLMedia chief executive Stuart Simms said: “The Google penalty, which was identified in January, has been well-documented in a series of updates in the first six months of the year and, while there remains a lot to be done, we made good progress in rebuilding and upgrading the assets during the first half.”
Simms said the company was seeking to restore its casino sites’ rankings in Google and will put forward a small number of the originally penalised sites for reconsideration in the fourth quarter.
He revealed that it made an unsuccessful test resubmission of a small number of sites in July.
Simms said: “We believe this test was not successful because the assets remained on our proprietary technology platform, rather than having been fully rebuilt on an open-source technology suite, as we plan to do; however no significant feedback or clarity is provided on the reasons for such an outcome.
“We are pursuing multiple routes to re-establishing our traffic levels in the casino vertical.”
Simms said this would include XLMedia working with a joint venture partner to promote two of its original premium sites.
The company has also begun developing new sites using internal and external resources to consolidate traffic from several former premium sites, a process that it aims to complete by the end of the first quarter next year.
“This multi-track approach minimises risk and maximises possible upside, while focusing resources and ownership on a more concentrated set of assets,” Simms said.
XLMedia’s personal finance and sports verticals were also hit in H1 by the impact of Covid-19, but the company has seen signs of recovery.
EBITDA fell 73 per cent from $18.6m in H1 2019 to $5.1m, and net income fell 99.2 per cent to $99,000.
Simms said that despite the hit, the provider made progress in building its portfolio of online assets.
He said: “Over the last six months, we have made good progress in reshaping the organisation, reducing complexity, flattening the hierarchy and beginning to bring in the complementary skills required for the future.
“Looking outward, as we laid out in April, the priorities of the business are changing to reduce risk and drive sustainable growth in the top and bottom line.”
In June, XLMedia revealed a decision to sell off its Finnish casino assets as it aimed to concentrate on regulated markets.