Outcome Health, a hot $5 billion startup, reportedly misled its advertisers

According to The Wall Street Journal, Chicago-based startup Outcome Health that raised $500 million in May at a $5 billion valuation misled its advertisers.

Between 2014 and 2016, Outcome charged for more screen installations than it actually performed this according to The journal. Employees reportedly also doctored screenshots that were meant to show that certain ads had run in a particular doctor’s office.

The startup installs screens in doctors’ offices free of charge and then runs advertisements like those for pharmaceutical companies, charging for the ad placement. According to the report, the company seems to have inflated to advertisers the number of screens that ads ran on, allowing it to generate additional revenue. If so, this would be a huge misstep in terms of internal governance for the company, especially as advertisers (like pharmaceutical companies) look for new channels to promote their products.

“When we have a shortfall in media delivery, we strive to identify the issue as quickly as possible and address it with our client through “make-goods” or “bonus media” provisions, such as extending a campaign or increasing the number of doctors’ offices we reach for that campaign.

“We would also note that incidents that the Wall Street Journal identified occurred between 2014 and 2016. The company also strongly denies having a practice of misreporting campaign information to customers. The company’s policy has always been to accurately report information to every customer on every program. If there was any misconduct by any employee, we will deal with it very strongly and take appropriate action.”

In October, Forbes reported that Outcome laid off 76 employees, as well as refunded Pfizer $4 million for its advertisement campaign after reportedly not getting the results from the campaign that it was looking for.

 

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