XLMedia, an affiliate marketing publisher working with the gaming industry, has released the results of its most recent fiscal period, and it doesn’t like what it sees. The interim report covers the first of this year, and revealed revenue that was off by about $2 million from what the company had expected to see. While some of this is to be expected, given the impact COVID-19 has had on the gaming industry in general, XLMedia also blames the poor results on Google, asserting that its “manual ranking penalties” cost it valuable real estate in the search rankings. 

The revenue taken in by the company in the period was $27.7 million, 35% lower than the $42.5 million it reported for the same period last year. Gross profits for the half fell 42% to $16.1 million, and the adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was off by 73% at $5.1 million. In addition to the slower performance and Google, XLMedia’s decision to close its media operations also contributed to the downturn.

Explains XLMedia CEO and Director of the Board Stuart Simms, “Our business has endured a number of unforeseen challenges during 2020 but, as we enter the second half of the year, I believe we are seeing signs of recovery in some key areas. These green shoots, coupled with a detailed and diverse plan to mitigate the impact of the Google manual ranking penalty, give me and the Executive team confidence we can enter 2021 with significant positive momentum and enhanced levels of control.”

The ”manual ranking penalty” refers to the intervention of Google’s workforce in ranking results and often leads to a reduction in organic traffic. Google reportedly has 13 different criteria used for the penalties, covering everything from hidden text on sites to hacking attempts to “spammy” website structures. XLMedia was deranked by Google this past January, which has hurt the company’s ability to capture more online traffic that has arisen from the COVID-19 pandemic.