Big Ozy Media advertisers suspend ad campaigns amid the turmoil

Several major advertisers for competitive digital media startup Ozy Media are putting their ad campaigns on hold following an article in the New York Times that raises questions about the company’s business practices.

Shares in this article

GS THE GOLDMAN SACHS GROUP, INC.

Ford Motor Co., Airbnb Inc., Goldman Sachs Group Inc. and Target Corp. are among the advertisers who have paused their campaigns, according to those familiar with the matter. Taken together, the paused advertising campaigns – which include other companies – add up to approximately $ 5 million in revenue for Ozy, one of the people said.

“We pause our advertising while Ozy Media addresses their current business challenges,” Ford said in a statement.

OZY MEDIA BOARD ANNOUNCES BUSINESS PRACTICE INVESTIGATION

The frozen advertising campaigns are the latest fold in the rapidly developing turmoil in the company. The New York Times reported on Sunday that Samir Rao, Ozy’s chief operating officer, impersonated an executive from Alphabet Inc.’s YouTube in a February fundraiser with Goldman Sachs. Carlos Watson, Ozy’s chief executive, said in a statement on Sunday that Rao’s behavior on the call was due to mental health issues, adding that Goldman Sachs was unaffected by the incident as it did not invest in Ozy.

The commotion at Ozy also affects programming. Katty Kay, a high profile Ozy recruit who was a correspondent and host for the BBC, said on Twitter Wednesday that she stepped down from Ozy this week.

Pictured: Carlos Watson, co-founder of Ozy Media. Several major advertisers for competitive digital media startup Ozy Media are putting their ad campaigns on hold after an article in the New York Times that raises questions about the company’s business practices

On Thursday, Marc Lasry, an Ozy investor and co-owner of the Milwaukee Bucks National Basketball Association team, said he would step down from the Ozy board due to a lack of relevant experience.

“I believe that going forward, Ozy will require experience in areas such as crisis management and investigations, in which I do not have particular expertise,” Lasry said in the statement. “I will remain an investor in the company and wish them all the best for the future.”

A spokeswoman for Ozy and Watson did not respond to requests for comment.

On Wednesday, Ozy’s board of directors said it had hired law firms Paul, Weiss, Rifkind, Wharton and Garrison LLP to “conduct a review of the company’s business operations” and that Rao had been asked to take a leave of absence.

ADVERTISING EXPENDITURE FOR INTERMEDIATE ELECTION 2022 EXPECTED RECORDS

The aftermath has spread to Ozy’s investors as well. SV Angel has sold its shares in Ozy, an unusual move for a venture capital firm. Axios had previously reported on the move from SV Angel. Axel Springer, another Ozy investor, has stated that it supports the Board of Directors’ investigation into the company’s business practices.

The New York Times article also raised questions about discrepancies between Ozy’s reported viewer size and his actual audience. Some ad buyers expressed disappointment that the problems with potentially inaccurate viewership were not being discovered by other ad tech companies in the industry.

Watson said in his statement on Sunday that the New York Times’ coverage of Ozy’s audience was “deeply flawed”.

Ozy had become increasingly attractive to brands as the advertising sector came under pressure to spend advertising money on minority-owned and minority-run businesses and media that addressed a diverse audience, according to those familiar with the matter. Watson is black.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Black media mogul Byron Allen is urging major US corporations to spend more advertising money on black-owned media companies. In May, Allen filed a lawsuit against McDonald’s Corp. one, accusing the fast food giant of discriminating against black-owned media companies. The lawsuit alleged that the restaurant chain had a “discriminatory contractual process”. Allen Media Group / Entertainment Studios owns television stations and networks such as the Weather Channel. A spokesman for McDonald’s said at the time that the company had taken steps to diversify its advertising spending.

Leave a Comment