A New York-based investment company has expressed “grave concerns” about digital media measurement platform DoubleVerify’s financial reporting, as well as the efficacy of its ad fraud detection product.
Spruce Point Capital Management has alleged “potentially manipulative and deceptive financial reporting and counting practices” around the company’s international business.
According to the report, DoubleVerify made several conflicting public statements about international sales being 20% of total revenues — later changed to 20% of advertiser direct revenue — in late/early 2021/2022.
DoubleVerify partners with some of the largest retail media networks in the world, including Amazon, Walmart, Target, Macy’s, Best Buy and Kroger. The company, which specialises in digital media measurement software and analytics that authenticates the quality and effectiveness of digital media, reported double-digit growth last year, driven by growth in pre-campaign activation across programmatic, social media and connected TV.
The report also alleged that DV is not transparent with customer reporting, consistently claiming “over 1,000 customers”, but at times referencing “1,000 brands.” The investment management company pointed out that one customer can have multiple brands.
The report stated that a former employee revealed to Spruce Point that internal discussions reflected a “misunderstanding” about what constituted a customer.
Another concern raised in the report was the efficacy of DV’s ad fraud verification product itself. It included the opinion of independent ad fraud researcher Dr Augustine Fou who said that legacy ad fraud verification vendors are failing to detect the most basic forms of invalid traffic, and are offering a “useless product” as far as brand safety is concerned.
Spruce Point also drew a potential connection between DV revealing it had payment disputes with some clients, and a post from Fou in which he claims advertising/agency whistleblowers told him that legacy ad fraud detection vendors were over-billing them.
In the report, Spruce Point registered its financial interest in DV’s competitor Integral Ad Science, stating: “We believe DV’s competitor Integral Ad Science offers superior value through better positioning to faster growing foreign markets, greater financial transparency, and stronger patent protection. As a result, we are long the stock….”
The Media Leader reached out to DoubleVerify for comment and have received no response at time of publication.
