Legal Action Cites Financial and
Reputational Damage Created by Adalytics' Inaccurate Paper
Targeting Black-Owned Direct Digital Holdings' Inclusive
Marketplace
HOUSTON, May 14, 2024
/PRNewswire/ -- Colossus Media LLC ("Colossus SSP" or the
"Company"), the inclusive supply-side advertising platform, today
filed a civil lawsuit against Adalytics Research LLC of
New York City for defamation,
injurious falsehood and false advertising.
The suit alleges that Adalytics caused Colossus SSP
– part of Direct Digital Holdings, Inc. (Nasdaq: DRCT) ("Direct
Digital Holdings"), the ninth Black-owned company in the U.S. to go
public – material and substantial harm by publishing a defamatory
paper riddled with inaccuracies. Per the filing: "These false
and misleading statements were made in an effort to damage Colossus
SSP's business and reputation for the purpose of selling Adalytics'
services and winning new business from ad buyers."
Specifically, the paper, officially published on May 10, 2024, while disseminated to the media
earlier, accused Colossus SSP of manipulating digital data used by
advertisers to target specific consumers in order to generate
higher prices and more revenue.
Colossus SSP contends that it did not have the ability to alter
such customer ID data, nor the knowledge of the value of this
information to advertisers, given that for the example raised,
Colossus SSP worked exclusively with an intermediary firm, which
governed how such transactions occurred.
"As made clear in the lawsuit, the assertions made in Adalytics'
paper are patently false and demonstrate a troubling
misunderstanding of the complexities of the programmatic
landscape," said Mark D. Walker,
Co-Founder, CEO and Chairman of Direct Digital Holdings. "It is
critical to note that not only did Colossus SSP not employ false
user IDs as accused, but the Company did not have direct control
over the IDs employed in the campaigns cited by Adalytics."
Beyond challenging the core argument and technical specifics of
the paper, the suit alleges that Adalytics'
recklessness in presenting this information has caused significant
damage to Colossus SSP's hard-earned reputation and its ability to
operate successfully in the advertising industry.
The suit reads: "Beyond the direct financial harm sustained
by Colossus SSP as a result of Adalytics' false post, the post has
caused damage to Colossus SSP's reputation and goodwill by accusing
Colossus SSP of engaging in fraudulent activity and impeaching
Colossus SSP's honesty, integrity and core business."
The lawsuit further goes on to say that Adalytics disseminated
its paper without ever discussing with Colossus SSP and refused to
provide Colossus SSP with the full piece prior to publication.
In an industry that has long struggled with a lack of
transparency and bad actors, Colossus SSP believes that the
publishing of the Adalytics paper is an attempt to make Colossus
SSP a scapegoat for some of these systemic industry issues.
"Technical integrations across a multitude of vendors open up
our ecosystem to discrepancies," said Walker. "Our job as an
industry is to resolve them. Even the largest, most reputable
ad-tech firms must continuously work back-and-forth with partners
to ensure that programmatic campaigns are executed correctly.
Indeed, some bad actors look to exploit this ecosystem and it will
take a holistic industry-wide approach to address these
challenges."
"Given the systemic issues involved in this matter, the ad-tech
industry should seriously consider why only Direct Digital
Holdings' Colossus SSP is being singled out and falsely accused of
wrongdoing," added Walker. "Colossus SSP plays a critical role in
the ecosystem by fostering a more diverse and equitable media
landscape. Its inclusive marketplace includes both big name media
brands and independent minority-owned publishers that previously
did not have access to the programmatic pipeline. The purpose of
Colossus SSP's legal action is to aggressively fight against
Adalytics' defamatory statements, and we fully expect that the
results will affirm the Company's ethical business practices."
Forward-Looking Statements
This press release may
contain forward-looking statements within the meaning of federal
securities laws, including the Private Securities Litigation Reform
Act of 1995, Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
and which are subject to certain risks, trends and
uncertainties.
As used below, "we," "us," and "our" refer to Direct Digital
Holdings. We use words such as "could," "would," "may," "might,"
"will," "expect," "likely," "believe," "continue," "anticipate,"
"estimate," "intend," "plan," "project" and other similar
expressions to identify forward-looking statements, but not all
forward-looking statements include these words. All statements
contained in this release that do not relate to matters of
historical fact should be considered forward-looking
statements.
All of our forward-looking statements involve estimates and
uncertainties that could cause actual results to differ materially
from those expressed in or implied by the forward-looking
statements. Our forward-looking statements are based on assumptions
that we have made in light of our industry experience and our
perceptions of historical trends, current conditions, expected
future developments and other factors we believe are appropriate
under the circumstances. Although we believe that these
forward-looking statements are based on reasonable assumptions,
many factors could affect our actual operating and financial
performance and cause our performance to differ materially from the
performance expressed in or implied by the forward-looking
statements, including, but not limited to: our dependence on the
overall demand for advertising, which could be influenced by
economic downturns; any slow-down or unanticipated development in
the market for programmatic advertising campaigns; the effects of
health epidemics, such as the ongoing global COVID-19 pandemic;
operational and performance issues with our platform, whether real
or perceived, including a failure to respond to technological
changes or to upgrade our technology systems; any significant
inadvertent disclosure or breach of confidential and/or personal
information we hold, or of the security of our or our customers',
suppliers' or other partners' computer systems; any unavailability
or non-performance of the non-proprietary technology, software,
products and services that we use or access through our partners;
unfavorable publicity and negative public perception about our
industry, particularly concerns regarding data privacy and security
relating to our industry's technology and practices, and any
perceived failure to comply with laws and industry self-regulation;
restrictions on the use of third-party "cookies," mobile device IDs
or other tracking technologies, which could diminish our platform's
effectiveness; any inability to compete in our intensely
competitive market; any significant fluctuations caused by our high
customer concentration; any violation of legal and regulatory
requirements or any misconduct by our employees, subcontractors,
agents or business partners; any strain on our resources, diversion
of our management's attention or impact on our ability to attract
and retain qualified board members as a result of being a public
company; our dependence, as a holding company, of receiving
distributions from Direct Digital Holdings, LLC to pay our taxes,
expenses and dividends; and other factors and assumptions discussed
in the "Risk Factors," "Management's Discussion and Analysis of
Financial Conditions and Results of Operations" and other sections
of our filings with the SEC that we make from time to time. Should
one or more of these risks or uncertainties materialize or should
any of these assumptions prove to be incorrect, our actual
operating and financial performance may vary in material respects
from the performance projected in these forward-looking statements.
Further, any forward-looking statement speaks only as of the date
on which it is made, and except as required by law, we undertake no
obligation to update any forward-looking statement contained in
this release to reflect events or circumstances after the date on
which it is made or to reflect the occurrence of anticipated or
unanticipated events or circumstances, and we claim the protection
of the safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995.
About Direct Digital Holdings
Direct Digital Holdings
(Nasdaq: DRCT), owner of operating companies Colossus SSP, Huddled
Masses, and Orange 142, brings state-of-the-art sell- and buy-side
advertising platforms together under one umbrella company. Direct
Digital Holdings' sell-side platform, Colossus SSP, offers
advertisers of all sizes extensive reach within general market and
multicultural media properties. The Company's subsidiaries Huddled
Masses and Orange142 deliver significant ROI for middle market
advertisers by providing data-optimized programmatic solutions at
scale for businesses in sectors that range from energy to
healthcare to travel to financial services. Direct Digital
Holdings' sell- and buy-side solutions manage on average over
125,000 clients monthly, generating over 300 billion impressions
per month across display, CTV, in-app and other media channels.
Media Contacts:
Direct Digital Holdings:
press@directdigitalholdings.com
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SOURCE Direct Digital Holdings