Millennial Media's stock has lost three-fourths of its value since the Canton company went public a year ago as an established force in the mobile advertising market. Ask CEO Paul Palmieri about that, and he'll repeat what he deems wise words from a prominent contemporary.
"I care very much about our share owners, and so I care very much about our long-term share price," Palmieri said, quoting from an interview Amazon.com CEO Jeff Bezos gave to the Harvard Business Review in January. "I do not follow the stock on a daily basis, and I don't think there's any information in it."
Millennial has maintained rapid growth — revenue jumped by 68 percent in the fourth quarter of 2012 relative to the same period a year earlier. But that hasn't been enough for Wall Street analysts, given lofty expectations for advertising opportunities on smartphones and tablet devices, and competition from heavyweights Google, Apple and Facebook — all of which are focused on translating the growing use of mobile devices into advertising revenue.
When the fourth quarter results were announced in February, Millennial shares lost 40 percent of their value in a day, and have slid even further since then. Shares of Millennial have been trading in the $6 range, well below the $25 it traded for on the company's New York Stock Exchange debut in March 2012.
Palmieri says he isn't letting the stock market doldrums become be a distraction from what he describes as a mission to defeat the larger rivals and command the mobile advertising market. Still, neither are its giant tech rivals, who are shifting quickly and using their broad reach to gobble up massive shares of the market.
"This is an expanding market, and we're a leader in that market," Palmieri said. "We've got to stay ahead."
Meanwhile, as Millennial focuses on riding the industry's growth, forecast to top $7 billion this year, the company is focused on deepening its roots in Baltimore. Parking woes that threatened its expansion at the Can Company development have been resolved, at least in the short term. And the company is still searching for a more permanent (and spacious) place to call home.
Millennial has risen from a 2006 startup that spent many of its early days at a site not far from its current headquarters — in the city's Emerging Technology Center incubator. Since then, it has expanded around the country and the globe, with about 380 employees and plans to continue to hire.
Its business has two sides — one building up a stock of advertising space on mobile apps and mobile-friendly websites, the other selling that space to advertisers. Millennial uses the reach of that ad network, plus the ability to narrowly target specific demographics and users for advertisers, to woo big-name brands looking to spend marketing dollars efficiently and effectively.
One campaign the company counts as a success targeted men browsing in between plays on Super Bowl Sunday to get them thinking about Valentine's Day a few weeks later. Jewelry store Pandora and its ad agency, Baltimore-based GKV, prompted the men to "Create a Valentine's Gift in Minutes."
Palmieri said he counts that ability to connect advertisers with unique audiences as a strength. The company's efforts to expand its ad network's reach and recruit top-dollar advertisers reinforce each other, he said. (The Baltimore Sun's advertising department works with Millennial on mobile advertising network sales.)
While Millennial Media has spent years dedicated to its mobile strategy, now some major players are also seizing on the burgeoning opportunities. Given the amount of time people spend browsing social networking sites Facebook and Twitter or searching via Google on their phones, it was an obvious step for those sites to exploit the medium.
Web advertising research firm eMarketer estimates that Google has a grasp on more than half of mobile advertising dollars to be spent this year, while Millennial Media's share is forecast at about 1 percent.
But while much of Google's advantage comes from ads served during web searches, Millennial is among the leaders when it comes to display ads, including banner or video ads on mobile websites and apps.
IDC, another research firm, estimated Millennial's share of the display ad market at about 17 percent in 2011, second only to Google's 24 percent.
Facebook and Twitter have moved quickly to embed ads in users' feeds, which allows for more frequent yet unobtrusive marketing, said Clark Fredericksen, vice president for communications at eMarketer. Google is meanwhile taking advantage of the fact that search ads are expected to be the fastest-growing for the industry, he said.