Several major advertisers are halting their business with Outcome Health following allegations that some employees of the prominent Chicago startup misled clients.
Outcome Health streams “point of care” advertising to screens and tablets that it places in doctors' offices. One of Outcome's largest customers, Bristol-Myers Squibb Co., said it has opted not to renew an ad agreement for 2018. Bristol- Myers had been expected to pay Outcome roughly $20 million this year, according to people familiar with the deal.
“We have decided not to continue our agreement with Outcome Health moving forward, and into 2018,” a Bristol- Myers spokeswoman said, declining to comment on the reason or on how much money the company has paid Outcome.
At least one major ad company, Omnicom Group Inc., has suspended advertising with Outcome. A spokeswoman for Omnicom's media group said it won't resume spending with Outcome until the company “conducts a full campaign-level, third-party audit of previously enacted campaigns in 2016 and 2017.” Omnicom Media Group directed some $20 million in advertising to Outcome this year, according to a person familiar with the matter.
Several other ad companies— Interpublic Group of Cos., Havas SA and Publicis Groupe SA—are putting deals with Outcome on hold or recommending that clients do so until Outcome provides verification of ad performance numbers, according to people familiar with the agencies' plans.
Interpublic's Healix Global health-care media agency isn't planning to renew ad deals with Outcome for 2018 unless Outcome assures it that there are no improprieties, a person familiar with the matter said.
Healix clients spend several million dollars a year with Outcome, the person said. Havas and Publicis have recommended to some clients that they reconsider their 2018 spending until a third-party verification of Outcome's services is conducted, people familiar with the matter said.
In all, such moves could deny Outcome tens of millions of dollars in potential revenue next year. During its recent fundraising, Outcome estimated 2016 revenue of about $130 million, according to a company presentation to investors that was reviewed by The Wall Street Journal.
David Goldin, an Outcome Health spokesman, said in response to inquiries from the Journal, “Outcome Health is actively leading the point-of-care industry in creating dependable delivery and measurement systems through transparent third-party validation, and we very much appreciate the overwhelming support from the vast majority of our customers who are making decisions based on the substantial, verified data they are currently receiving.”
Mr. Goldin added that Outcome has signed deals for millions of dollars in new advertising from pharmaceutical companies as well as medical device and lifestyle companies.
Last month, the Journal reported allegations by advertisers and former employees that some Outcome employees had misled customers by charging them for ads on more screens than the startup had installed. Outcome offered free advertising worth tens of millions of dollars this year to make up for shortfalls, the Journal reported.
An Outcome spokesman, Lanny Davis, told the Journal last month that Outcome had put three employees on paid leave and hired the law firm of former U.S. attorney Dan Webb “to review allegations about certain employees' conduct” that were raised internally and by the Journal. Mr. Davis said Outcome “has always upheld the highest ethical standards” and has adopted new policies to comply with customer contracts.
At a Sept. 13 meeting in New York sponsored by the Point of Care Communication Council, some big pharmaceutical advertisers raised questions about point-of-care ad companies' claims about ad performance, people who attended the meeting said. Advertisers at the meeting called for more transparency, these people said.
Christine Franklin, executive director of the Point of Care Communication Council, said the purpose of the meeting was to present work from the group's standards committee, including proposed auditing standards.
In July, Outcome hired media- audit firm BPA Worldwide, which verified the size of Outcome's network and its system for delivering ads. Richard Murphy, BPA's senior vice president of auditing, said his firm has reviewed about a dozen Outcome ad campaigns to date and plans to audit more this quarter. “In reviewing those campaigns, we have [seen] some under-delivery and some over-delivery, which is typical of digital media campaigns,” he said in an email.
BY SUZANNE VRANICA AND ROLFEWINKLER