Spot Runner lays off 50

Nick Grouf once told me he started his online-advertising agency, Spot Runner, in Los Angeles, not Silicon Valley, for one reason: The video-production talent he needed to customize television ads en masse was down south. Now, a laid-off employee tells us Spot Runner has axed 100 employees, and is abandoning its original business of helping small businesses buy locally targeted TV ads. (Update: Rosabel Tao, a Spot Runner spokeswoman, says the actual number is 50, about 10 percent of the company's employees.) The startup, which recently made a high-profile hire in Joanne Bradford, a Microsoft media executive, is now focusing on reselling online ads to small businesses, and competing with established agencies to manage TV buys for large brands. Despite the layoffs, the company is hiring — but mostly for search-engine marketing jobs. That leaves Grouf competing in two crowded fields, from the wrong city, with little to distinguish his company. Save, that is, for the inflated expectations of his investors, who have piled $111 million into a vision which has proven wrong. (When asked to explain why he raised $51 million in May, Grouf specifically denied that his company was running short on cash.) Here's the layoff tip:

Today was Black Tuesday at Spot Runner. Due to a strategic shift, they fired 100 employees at our LA offices that did not have the "skill set" they required. Spot Runner is no longer going to serve as a provider of television advertising to local businesses. I'm sure they will have no trouble competing with major holding companies for national TV advertising accounts, or selling keyword based search engine marketing to local businesses who can save 50% by going directly to Google. I'm curious to see Grouf's exit strategy for this quagmire.

Here's Grouf talking about the local-advertising strategy, now apparently being abandoned:

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Agency Spy earlier aired rumors of financial trouble at Spot Runner, saying the company had recently rescinded job offers it had made. The blog also noted that Bradford hadn't been around the office much — absences a Spot Runner flack put up to business travel and Bradford's relocation from the Bay Area to L.A.

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