Ozy Media’s main advertisers suspend ad campaigns amid uproar

Several major advertisers at struggling digital media startup Ozy Media are suspending ad campaigns following a New York Times article that raised questions about the company’s business practices.

Ford Motor Co., Airbnb Inc., Goldman Sachs Group Inc. and Target Corp. are among the advertisers who have suspended their campaigns, according to people familiar with the matter. Together, the suspended ad campaigns – which include other companies – represent around $ 5 million in revenue for Ozy, one of the people said.

“We are suspending our advertising while Ozy Media tackles its current business challenges,” Ford said in a statement.

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Frozen advertising campaigns are the latest wrinkle in the rapidly unfolding corporate turmoil. The New York Times reported on Sunday that Ozy COO Samir Rao impersonated an Alphabet Inc. YouTube executive during a February fundraising appeal with Goldman. Sachs. Ozy chief executive Carlos Watson said in a statement on Sunday that Rao’s behavior during the call stemmed from mental health issues, adding that Goldman Sachs was not affected by the incident as he was not affected by the incident. had not invested in Ozy.

The uproar at Ozy also affects his programming. Katty Kay, a prominent Ozy recruit who was a BBC correspondent and presenter, said on Twitter on Wednesday that she had resigned from Ozy this week.

Pictured: Carlos Watson, co-founder of Ozy Media. Several major advertisers at struggling digital media startup Ozy Media are suspending ad campaigns following a New York Times article that raised questions about the company’s business pra

On Thursday, Marc Lasry, investor in Ozy and co-owner of the Milwaukee Bucks National Basketball Association team, said he was stepping down from Ozy’s board, citing a lack of relevant experience.

“I think to move forward, Ozy requires experience in areas such as crisis management and investigations, where I have no particular expertise,” Lasry said in the statement. “I remain an investor in the company and wish it the best for the future.”

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

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

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The fallout also spread to Ozy investors. SV Angel sold its shares in Ozy, an unusual transaction for a venture capital firm. Axios reported SV Angel’s move earlier. Axel Springer, another investor in Ozy, said he supports the board’s investigation into the company’s business practices.

The New York Times article also raised questions about the discrepancies between Ozy’s reported audience size and his actual audience. Some ad buyers have expressed disappointment that issues with possible wrong audience numbers have not been discovered by other ad technology companies in the industry.

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

Ozy had become increasingly attractive to brands, as the advertising industry faced pressure to spend advertising dollars with companies owned or run by minorities and with media that target diverse audiences, according to reports. people familiar with the matter. Watson is black.

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