Video ad measurement rivalry spills into the courtroom.

Last week, a jury in California awarded $18.3 million to video measurement firm iSpot to resolve its lawsuit against EDO, a measurement company co-founded by actor Ed Norton.

The suit, filed in 2022, alleges that EDO breached its contract with iSpot by misusing the latter’s TV ad data to build a competing product.

ISpot sought $47 million in damages, citing the harm caused by EDO's actions. Although the jury awarded less than half of this sought amount, it agreed that EDO had violated multiple contract provisions, including exceeding data access limits beyond contractual terms and using that data to develop rival technology.

“Measurement is the business of trust, transparency and accountability, and EDO proved they have zero regard for any of that through a pattern of data theft, obfuscation, evidence deletion and lying,” iSpot stated in a statement shared with AdExchanger.

EDO plans to appeal the decision, dismissing iSpot’s accusation as a “desperate attempt to slow down a smaller, smarter competitor,” according to their statement.

However, an internal email viewed by AdExchanger suggests EDO did intend to use iSpot’s data to build a competing product. In a September 2017 message, sent by EDO CEO Kevin Krim to Norton, he mentions the company's intention to “transition away from iSpot and steal their business.”

A behind-the-scenes peek

According to the complaint, EDO, founded in 2015, allegedly began misusing iSpot’s data shortly after becoming a client in 2014, back when EDO was still known as “Big Data Box Office.” Eventually, it changed its name to EDO, which stands for “Entertainment Data Oracle.”

At that time, the Norton-backed company aimed to help studios predict box office sales.

ISpot’s client contracts explicitly prohibit the use of its data to “build any services that compete with iSpot or give the impression that they do.” However, in 2016, Sony informed iSpot that EDO had pitched it a product that appeared very similar to iSpot’s offering. Krim has denied this.

While iSpot threatened to remove EDO's access to its data after Sony’s tip, the two companies maintained a contractual relationship until 2018. In 2017, EDO gained expanded access to iSpot’s dashboard through a mutual client for whom EDO was conducting a project. Although EDO’s contract was restricted to the movie category, it accessed viewing data across all verticals through this mutual client, identified as Disney.

EDO did not renew its iSpot contract when it lapsed in early 2018.

But a 2017 internal email between EDO executives with the subject line “iSpot API” indicates that EDO was considering a plan to maintain access covertly. The email, also reviewed by AdExchanger, read: “We should access this API through some proxy to hide who we are.”

After EDO’s contractual relationship with iSpot ended in 2018, its access to iSpot’s data continued when it hired Nadya Teyfukova from Horizon Media, who had access to iSpot’s dashboard via her previous employer. According to court filings, Ed Rugoff, then EDO’s EVP of studio analytics, directed her to download iSpot’s data when he discovered that her credentials still worked.

ISpot sued Teyfukova in 2021 after finding she downloaded hundreds of reports over 18 months. At that point, Rugoff instructed her to delete any files containing iSpot data from her EDO laptop, which she did. In 2022, iSpot amended its suit against Teyfukova to also include EDO as a defendant.

What now?

As EDO prepares its appeal, the verdict highlights the fierce and cutthroat nature of the advertising measurement business.

Although EDO never competed in the measurement currency space, a key distinction from iSpot, it has carved out a niche with outcomes-based measurement. ISpot, the elder of the two companies, founded in 2012, has a long-standing reputation for providing cross-screen attribution.

Video ad measurement has been a significant pain point within the TV industry. The pressing need for standardization leaves little room for innovative differentiation. (There are only so many ways to count a video ad.)

Still, “measurement is supposed to be about providing truth, transparency, accountability, and trust for the marketplace,” according to the media advisory iSpot released regarding the ruling.

However, it may be hard for media buyers and sellers to maintain confidence in measurement providers when those same providers reportedly find themselves caught up in legal battles.