Rival gas pump DOOH networks in court battle
September 2, 2010 by Dave Haynes
The different DOOH companies that put screens on gas pumps have long been scrapping away with each other for ad dollars, but that fight has turned a little ugly – with two of the big three in court.
The web site Courthouse News is reporting (Aug. 17, 2010) that GSTV has filed a claim in Superior Court in Los Angeles that a guy now working as VP Sales for rival Outcast has been disparaging the company and using its trade secrets.
GSTV claims Michael Mongeluzzo (right) has misappropriated proprietary information he learned through negotiations with GSTV, when he was a VP Sales at NBC and talking to the company about a content deal. He later left NBC and went to work for Outcast.
GSTV was started in 2005 by a group of media executives, and has built a network of more than 8,000 digital media outlets at gas pumps across the United States, according to the complaint. It claims its “high quality programming mix of content and advertising … runs 24 hours a day through multiple loops that are broadcast on digital screens installed on fuel dispensers. The content broadcast on the GSTV Network includes local and national news, sports, and weather from a variety of leading networks, such as NBC and ESPN.”
Its revenue come from ads, and its sales team “has been able to generate millions of dollars in advertising revenues,” according to the complaint.
During negotiations with NBC in 2009, GSTV says, Mongelluzzo was given confidential access to its trade secrets. GSTV claims that after Mongelluzzo quit NBC he went to work for Outcast, GSTV’s competitor.
Both Outcast and Mongelluzzo have denied that they have any of GSTV’s proprietary information, according to the complaint. But GSTV claims that “Outcast began disparaging GSTV in the marketplace and began using GSTV’s confidential client lists and information to contact and interfere with GSTV’s customers, advertisers and business partners.”
GSTV claims the defendants lied about GSTV, claiming that Outcast had a greater viewer impression rate.
GSTV claims that Nielsen Media Research uses “impressions based on transactions at fuel dispensers that have display screens installed” to give it a Nielsen rating.
It claims that “Outcast and Mongelluzzo used GSTV’s confidential and proprietary data to repeatedly misrepresent to GSTV customers and partners that GSTV was lying to customers and fabricating key metrics about the GSTV Network. Specifically, Outcast publicly and falsely claimed that GSTV has substantially fewer actual impressions than reported by Nielsen, and that GSTV reports impressions from fuel dispensers on which GSTV Network screens have not been installed.”
GSTV claims that among “Outcast’s systematic and ongoing defamatory tactics” are that “Mongelluzzo has stated that GSTV’s audited average monthly impressions per station are so high, compared to Outcast’s reported average, that they must be false or exaggerated.”
GSTV adds that Mongelluzzo was so presumptuous he “called into question the accuracy of GSTV’s audited data, the audit methodology, and even the auditors themselves, despite knowing that his statements are false and/or misleading.”
The 19-page complaint adds that “Outcast and Mongelluzzo have claimed to GSTV clients that Outcast provides 36 million impressions, as compared to GSTV’s 27 million impressions, when in fact Outcast is counting (without disclosure) two impressions per fuel transaction while GSTV is counting one impression per transaction.” (Parentheses in complaint.)
GSTV seeks an injunction, compensatory and punitive damages, alleging misappropriation of trade secrets, libel, interference with economic advantage, false advertising and unfair competition.
The report is two weeks old and I assume is not resolved. Digging into court filings would take knowing which superior court, case numbers, money and most of all time … none of which I have.
Hopefully it gets squared away quickly. Adcentricity suggests the gas vertical is a hot one with media buyers, and I am sure this sort of bun fight is not good for growth. It also forces involved companies to divert focus from what really matters, and chews up finite operating capital.