The digital marketing industry is one of the few segments in the technology sector that have been affected by the rapid developments in tech. Companies that disrupted this business segment several years ago are now tasked with redefining themselves to compete with startups that have adopted aggressive pricing and marketing techniques to claim their share of the market.  Most small and medium-sized businesses are finding these digital advertising agencies to be quite useful especially when it comes to pricing.

The internet has made it a requirement for almost every business to optimize their services for the online customer. This is one of the reasons startup SEO companies have been on the rise over the last few years with virtually all marketing consultants keen to equip themselves with the skills and tools required to optimize online businesses. Some years ago, reputation management was limited to print media, television and radio broadcast.

However, if today a company wants to restore its reputation after some considerable damage, it would have to think of online magazines, social media platforms, and email marketing campaigns. It is a completely different playground, which requires the expertise of those equipped with the skills and have the tools capable of reaching out to the online customer in the most feasible way.

This flexibility demonstrated by small digital marketing startups has been giving the big players in the industry a run for their money over the last few years—and based on the performances of some of the few that are publicly traded, it’s clear that their bottom lines have dwindled thereby resulting in significant declines in stock prices.

Here is a quick rundown of some of the pure-play digital marketing stocks that have been at the receiving end of a rapid growth in competition.

Rubicon Project’s (NYSE: RUBI) shares have dropped more than 80% in the last 12 months after hitting a high of $30 in April last year. The company’s stock now trades at just $5.00 per share. This is, even though, the company’s revenue grew by 12.1% last year compared to the previous year’s results. However, the decline in stock price could have been caused by the tepid profit margin after the company posted an annual loss of $18.1 million, having broken even in 2015.

Based on the company’s most recent quarter results (Q1, 2017), things could get worse this year after its Q1 revenue declined 33% compared to the same period last year. The company also posted a net loss of $15.84 million this past quarter compared to a net income of $2.28 million in Q1 2016.

Another digital marketing company whose stock has not fared well over the last few years is Rocket Fuel (Nasdaq: FUEL). Shares of Rocket Fuel are down 88% from their peak price of $32.00 reached in 2014. This decline in stock price also mirrors the behavior of the company’s net income over the last three years during which it has not been able to break-even. The company’s top line has recorded modest growths on a year-over-year basis over the last three years, but that seems to have slowed significantly in 2016.

Rocket Fuel reported revenue of $456 million last year making it one of the largest pure-play digital marketing companies in the market, but its net loss of $65.7 million speaks volumes. It shows a lack of efficiency in managing costs. The company has also been busy making strategic acquisitions, which could also explain the squeeze in profit margins.

Perhaps, one exception in this market would be YuMe Inc. (NYSE: YUME), which has gained more than 60% since September 2015. The company’s stock price is currently pegged at about $4.80 per share, up $1.80 per share from a price of $3.00 per share over the last 18 months.

This makes it one of the best-performing stocks in this particular market since 2015. So, what makes it so different from its rivals? Well, unlike Rubicon Project and Rocket Fuel, YuMe Inc. has maintained a leveled performance on its bottom line. Over the last three fiscal years, the company just missed out the break-even point with a loss of less than $10 million, bar 2015. In the most fiscal year, YuMe reported revenue of $160 million and a net loss of $7.7 million.

Nonetheless, when you stretch the company’s performance back a year earlier, YuMe Inc is yet to reach the highs of $6.30 reached in August 2014. It’s still some 7% down over the last 18 months. However, the stock appears to be on a run, and could potentially rally 23% to reach its 2014 high.

Conclusion

In summary, pure-play digital marketing stocks appear to be in a lot of trouble. One of the reasons behind this is the fact that now, there are several tools online that businesses can use to optimize their online presence. Digital advertising agencies are also playing their part while large data mining and analytics firms like Nielsen (NYSE: NLSN) and comScore (Nasdaq: SCOR) are also getting their cut.