In a development that suggests a possible slowdown in a hard-to-track, but supposedly fast-growing form of alternative media, experiential marketing agency Alloy Inc. reported a 16% drop in its first
quarter revenues. The company, considered a leader in experiential marketing, including alternative out-of-home media, consumer panels, and promotions, attributed the decline to weak short-term
demand, but said it expected the market to pick up soon.
"There was softness in demand in the quarter and some of our business segments are expected to deliver more of their revenue and profits
in the back half of the year." Alloy Chairman-CEO Matt Diamond stated in the company's first quarter earnings release.
Alloy, which claims to be one of the nation's largest providers of
"non-traditional media programs" aimed at targeted consumer segments, said total revenues dropped to $37.8 million, a decline of $7 million from the first quarter of 2006, though it expects revenues
to expand due to new acquisitions, including Channel One and Frontline Inc.
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Promotion-related revenues were hardest hit, decline 29% to $13.5 million in the quarter due to a reduction in the
number of events and sponsorship sales for Alloy's "Spring Break" promotions, as well as lower sampling revenues attributed to a combination of client budget reductions and changes in program
scheduling.
Media revenues were also hit, declining 7% to $10.4 million during the quarter due to lower out-of-home and interactive media deals.
Placement revenues fell 5% to $13.8 million
due to lower volume of broadcast and multicultural media buys, which were offset slightly be higher college and military newspaper buys.