Chicago-based Outcome Health is having a bit of a bad press day after the Wall Street Journal published this afternoon the results of a five-month look into the digital OOH media company, with the story suggesting the company misled the media value of its network to its core advertising clients.
The WSJ story, which is behind a pay wall, says in part:
After investors including Goldman Sachs Group Inc. and Google parent Alphabet Inc. poured around $500 million into Outcome at what the Chicago company said was a valuation of $5.5 billion in May, prominent venture capitalist Bill Gurley tweeted that Mr. Shah, its chief executive, was “the real deal.”
Somewhat less real were aspects of some deals Outcome cut with pharmaceutical advertisers, say former employees along with several advertisers. Interviews with these people as well as internal documents and other material from Outcome reviewed by The Wall Street Journal show how some employees misled pharmaceutical companies by charging them for ad placements on more video screens than the startup had installed.
Some Outcome employees also provided inflated data to measure how well ads performed, created documents that inaccurately verified that ads ran on certain doctors’ screens and manipulated third-party analyses showing the effectiveness of the ads, according to some of these people and documents.
— Rolfe Winkler (@RolfeWinkler) October 12, 2017
Outcome has made several big announcements in the last few months and become a high-profile player in Chicago’s efforts to develop and nurture a tech scene. Known for many years as Context Media, Outcome recently announced big hiring plans and naming rights to a flashy new office tower that will serve as its home.
I’ll go through the motions here of asking Outcome, if one of their senior folks reads 16:9, to provide comment and context … but there are waaaaay bigger media outlets they’ll be talking to before me. No response on its twitter feed or Newsroom page.
The company responded to the WSJ story expressing pride, saying there are best practices but conceding there are growing pains when a company scales rapidly from 4,000 to 40,000 doctors’ offices.