Vizio sues MediaMath for $ 900,000 in unpaid bills

[ad_1]

TV maker Vizio, which operates the Smart TV Inscape ad data unit, is suing ad technology company MediaMath over what it claims to be at least $ 900,000 in unpaid bills.

In the lawsuit, filed by Vizio Services LLC on October 1 in the U.S. District Court for the Southern District of New York, Vizio claims that MediaMath Inc. violated the contractual agreement between the two companies.

Vizio is also seeking to conduct an audit of MediaMath’s gross revenue to determine the total amount now owed, an amount he hopes will be determined at trial, “but in no case less than” $ 900,000.

In a statement, a MediaMath spokesperson said: “Our framework for digital advertising, built on modernized connections between brands and publishers, is supported by strategic partners who share our vision of delivering responsible media, addressable and aligned.

The spokesperson continued: “The Vizio assets in question were not used by our customers to guarantee the minimum [guaranteed payment] and we believed we were negotiating in good faith to make these assets valuable to the market while crafting a future business deal that didn’t require us to pay for data our customers weren’t buying.

The MediaMath spokeswoman said the company was confident it “would find a mutually beneficial solution with Vizio within a short period of time.”

Disputes between parties often occur in the ad space, although it is unusual for them to escalate into litigation.

Vizio did not respond to requests for comment, which were directed both directly to the company and through its lawyer.

Founded in 2009, Inscape was originally called TV Interactive Systems. The company, later known as Cognitive Media Networks, was acquired by Vizio in 2015 and renamed Inscape the following year. Inscape’s core product is its Automatic Content Recognition technology, which enables advertisers, broadcasters and smart TV manufacturers to view data from devices such as set-top boxes, set-top boxes and game consoles. Inscape said in June that it has an opt-in consumer footprint of more than 15 million smart TVs in the United States. its WatchFree streaming service and on other partner applications.

According to the lawsuit, MediaMath first engaged in a data buying conversation from Vizio in the first quarter of 2018. MediaMath “tested the waters,” the lawsuit says, entering into a series of nine short-term deals. with Vizio between June 2018. and December 2019. MediaMath fully paid for Vizio’s services during that time, according to the lawsuit.

In September 2019, the couple entered into a longer contract for 15 months. MediaMath was required to make a guaranteed minimum payment and report to Vizio. The lawsuit alleges that “notwithstanding its contractual obligations, MediaMath failed and refused to pay anything” under the contract, which included a disclaimer stating that Vizio gives “no express or implied warranty” regarding the data – including whether it will meet its customers’ requirements.

In May of this year, MediaMath sought to renegotiate the terms of the deal at “significantly reduced rates” – an attempt, according to Vizio in the lawsuit, to withdraw payments over a longer period.

In June, Digiday announced that MediaMath had appointed investment bank Centerview Partners to explore its strategic options, which could include a debt restructuring or possible sale. MediaMath declined to comment on the report at the time, but a spokeswoman said on Wednesday (October 7) that the company was not actively exploring a sale of the company or a similar transaction.

Vizio claims in his lawsuit that a possible sale of MediaMath assets “could result in the insolvency or dissolution of the company.”

“On information and belief, an extended payment schedule under the contract allows MediaMath to dishonestly improve its balance sheet, resulting in a higher purchase price for MediaMath’s assets,” the lawsuit alleges.

A MediaMath spokeswoman said the company had instead used advisers “to manage the regular fundraising process.”

However, “the connection made in the lawsuit is factually incorrect,” said the MediaMath spokeswoman. “The dissent with Vizio is purely related to the use of their data asset and its relevance to customers and partners. “

Vizio’s lawsuit claims that MediaMath said in an August letter that it would not make any further financial commitments to Vizio.

The ad tech industry has experienced a prolonged period of turmoil and consolidation in recent years – although mergers and acquisitions in the space largely came to a halt when the coronavirus pandemic first struck. Some ad technology vendors and agencies were particularly affected initially as advertisers reduced their marketing spending.

Like other companies in the industry, MediaMath, which is a demand-side platform, responded in April by downsizing and rolling out pay cuts. In June, the company received approval for a loan of $ 5 million to $ 10 million under the U.S. Small Business Administration’s Paycheck Protection Program.

In May of this year, digital ad dollars started to reappear in the market. M&A activity has also started to pick up – although there were just eight ad technology deals in the United States in the third quarter of this year, up from 13 deals in the year quarter. last, according to investment bank LUMA Partners. Research firm eMarketer predicted earlier this month that digital ad spend would rise 7.5% this year, an upward revision from its estimate this summer of just 1.7% growth.

Founded in 2007, MediaMath has raised more than $ 500 million in funding to date and has approximately 385 employees in the United States, according to its PPP loan application; LinkedIn lists MediaMath as having 576 employees. Much of MediaMath’s recent strategy has revolved around its “Source” framework, which aims to give advertisers and publishers more visibility into the costs and mechanisms of their digital advertising supply chains.

Update: This article has been updated to include more details about MediaMath membership. A previous version of this article only contained information about MediaMath’s US workforce.

[ad_2]

Comments are closed.