TIDMLSAI
RNS Number : 4683I
Location Sciences Group PLC
14 December 2020
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the
publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain.
Location Sciences Group PLC
("Location Sciences" or the "Company")
Potential Defamation Action Against the Company
Location Sciences (AIM: LSAI), the leading location verification
company, announces that it has received a letter before action (the
"Letter") from Blis Global Ltd (previously known as Blis Media
Limited) ("Blis") alleging that Location Sciences has made false
statements and allegations regarding Blis which have the potential
to cause Blis reputational harm and financial loss.
Location Sciences has taken legal advice in relation to the
Letter and believes the claims made by Blis in the Letter are
baseless and will take all necessary action to protect the
interests of the Company. Further information relating to the
Letter is contained in the appendix to this announcement set out
below.
A further announcement on this will be made as appropriate.
Mark Slade, CEO commented "While this is a wholly unsatisfactory
situation, and one which we would have preferred to resolve
privately, this does show our shareholders why our technology is
needed in this deeply opaque market. We hold true to a basic
principle that it is simply not acceptable for supply side partners
to alter the data they pass to our platform for verification. The
biggest disappointment to me is that an industry that is in deep
need of transparency, especially given the privacy implications to
consumers, is so resistant to verification and transparency.
It is therefore important for the industry that brands and their
media agencies act upon this type of behaviour and back third-party
verification of the suppliers as a means to provide true
transparency on how digital advertising campaigns are being
delivered.
When this occurs, we believe the real power of location-based
advertising will be revealed."
For further information please contact:
Location Sciences Group PLC via Milk & Honey PR
Mark Slade, Chief Executive Officer
David Rae, CFO and Commercial Director
Allenby Capital Limited (Nominated Tel: +44 (0)20 3328
Adviser) 5656
David Hart
James Hornigold
Peterhouse Capital (Broker) Tel: +44 (0) 20 7220
Charles Goodfellow 9791
Eran Zucker
Tel: +44 (0)20 3637
Milk & Honey PR 7310
Kirsty Leighton
Jessica Ballinger
APPIX
Summary
Shortly after a location-based advertising campaign went live at
the beginning of September 2020, Location Sciences' Verify platform
flagged a new, persistent anomaly related to data originating from
Blis.
The anomaly was then investigated by Location Sciences and it
became apparent as a result of those investigations that Blis was
manipulating the data, in that it was not passing true raw data to
the Verify platform. The effect of this data manipulation was to
enhance Blis's quality scores within the Verify platform.
In performing its duties as the verification partner, Location
Sciences then presented its findings and observations to the media
agencies involved in the test campaigns for Unilever and Aldi,
namely GroupM, Mindshare and Universal McCann.
As part of the Company's presentation to its customers, it set
out its proposed next steps. Specifically to open joint discussion
to discuss the findings with Verify customers and Blis and also for
Blis to halt the manipulation of the true raw data being passed to
Verify which, if it did so, would allow verification of actual
location signals used to deliver the location-based advertising
campaigns (this is the purpose of Verify).
Instead of seeking to resolve the issue with the Company, Blis
engaged legal advisers and has threatened legal action against the
Company on the grounds of potential defamation.
Location Sciences has significant evidence to support its
position and is willing to share this information with an
independent arbiter to assess and corroborate the position.
The directors are confident in the position taken by the Company
and have taken every step, including taking appropriate legal
advice, to protect the position of Verify in the marketplace.
Background to Blis Relationship
In early September 2019, Location Sciences entered a partnership
with Blis in respect of "Verify", the Company's location data
verification platform. At the time this partnership was announced,
on 5 September 2019, Greg Isbister, CEO of Blis, commented:
"Transparency and data accuracy are at the core of our business,
underpinning everything we do. Our proprietary technology, Smart
Pin, filters out over 80% of the data received because it does not
meet our quality and accuracy standards. Our clients turn to us for
high-quality data to better understand their customers and drive
engagement and sales. Being independently recognised by Location
Sciences both for location data and signal quality accuracy adds a
valuable layer of impartial authentication for our customers. We're
proud to be the first in our industry to offer independently
verified data on a global scale."
As per the quote from the CEO of Blis, at the core of the
partnership agreed between Location Sciences and Blis was a
commitment to transparency and data accuracy. However, as the
partnership progressed, Location Sciences became concerned that
Blis was not utilising Verify as the Company envisaged, i.e. to
provide transparency to the accuracy and quality of the location
data used to deliver location-based advertising campaigns.
Whilst publicly declaring that transparency and data accuracy
was at the core of Blis's business, Blis made no attempt to
incorporate Verify on its campaigns unless it was mandated to by
the end-brand customer or media agency, where Location Sciences had
already established a relationship. This was against the principle
of the partnership, where both Location Sciences and Blis would
promote the use of third-party verification as a means to advance
transparency within the industry.
Furthermore, through numerous communications between Blis and
Location Sciences' engineering teams, it became apparent that Blis
was attempting actively to learn the proprietary nature of the
Location Sciences software. This is disputed by Blis.
Nevertheless, Location Sciences continued to work in good faith
with Blis with the objective of improving transparency within the
industry.
Verify's Role in the Location-Based Advertising Industry
Location Sciences works with suppliers, such as Blis, to assist
them with the process of analysing location data that they are able
to obtain for onward provision to their end-brand customers
(predominantly corporate customers running a location-based
advertising campaign). In addition, and no less importantly,
Location Sciences works with end-brand customers directly to
sense-check the quality of location data that is provided to them
by suppliers such as Blis.
One of Location Sciences' key roles in the advertising sector is
to identify the actual quality of location signals used to deliver
location-based advertising campaigns as well as to detect actual or
potential fraud. The role is analogous to that played by ratings
agencies, such as Moody's, in the financial sector where inter alia
data is analysed and assessed to rate credit and debt risk.
Consequently, the very essence of Location Sciences' purpose is
to act as an independent third party to verify the accuracy and
quality of location data that is obtained by suppliers and which is
provided to the end-brand customer.
Blis's Data Manipulation
Shortly after a location-based advertising campaign went live at
the beginning of September 2020, Location Sciences' Verify platform
flagged a new, persistent anomaly related to data originating from
Blis.
The anomaly was then investigated by Location Sciences and it
became apparent as a result of those investigations that Blis was
manipulating the data, in that it was not passing true raw data to
the Verify platform. The effect of this data manipulation was to
enhance Blis's quality scores within the Verify platform.
In performing its duties as the verification partner, Location
Sciences then presented its findings and observations to the media
agencies involved in the test campaigns for Unilever and Aldi,
namely GroupM, Mindshare and Universal McCann.
Within the presentation made to Verify customers, while
providing details of the data manipulation in the test campaigns,
Location Sciences also set out four steps to resolve the situation,
namely:
1. Open joint discussions to explore the findings with Verify customers and Blis;
2. Blis should halt the manipulation of the coordinates being
passed to Verify and to submit true raw data to Verify and thus
allow verification of actual location signals used to deliver the
location-based advertising campaigns (this is the purpose of
Verify);
3. Blis should provide plain text Device and Publisher IDs to
enable additional validation (unlike other location suppliers these
are currently anonymised by Blis);
4. Location Sciences would deploy a new patch to Verify to
detect this form of direct data manipulation to ensure Verify
results were a true and accurate reflection of how location-based
advertising campaigns had been implemented.
Blis's Response to Location Sciences Findings
Instead of seeking to resolve the issue with the Company, Blis
engaged legal advisers and has threatened legal action against the
Company on the grounds of potential defamation.
Blis has cited a number of potential defamatory claims in
respect of the findings and observations presented by Location
Sciences to Verify customers and allege the Company directors are
falsely mis-representing Blis and its business to its customers and
clients.
In tandem with Blis threatening legal action against the
Company, it contacted the Verify customers involved in the test
campaigns and advised them that they had actually altered the data
being passed to Verify to overcome "material flaws" in the
product.
There was no communication by Blis to either the Company or
Verify customers of this data manipulation until after Location
Sciences had reported its findings and observations to the media
agencies involved in the test campaigns for Unilever and Aldi.
Location Sciences Response
The detailed investigations undertaken by the Company show that
Blis has manipulated data submitted by it to the Verify platform.
The effect of this manipulation was that the Blis location-based
advertising campaigns received and artificially high 'Quality
Score' from Verify.
In addition to Blis's communications with Verify customers,
where it has retrospectively advised those customers that it
changed the data being supplied to Verify, Blis has also admitted
to manipulating the data in written communication with the Company,
which they have again retrospectively claimed to be to correct
"material flaws" in the Verify platform.
As far as the Company is concerned, Blis has provided no
evidence of any material flaw in the Verify platform and the
purported issues raised by Blis have been investigated by the
Company and found to have no material impact on the performance of
Verify. It is further noted that Blis is the only user of the
Verify platform that has raised any alleged flaws in the platform.
Similarly, Blis is the only supplier using the Verify platform that
has supplied data showing the anomalies which led to the findings
presented to the media agencies involved in the test campaigns for
Unilever and Aldi.
In the Company's view, the strategy of Blis in pursuing action
against it is to detract from the fact that Blis has manipulated
data being passed to Verify, the impact of which is to artificially
improve the 'Quality Score' on its location-based advertising
campaigns.
Location Sciences has significant evidence to support its
position in this regard and has offered to share this with an
independent arbiter as a means to resolve the dispute and provide a
way forward for both parties.
The directors are confident in the position taken by the Company
and have taken every step to protect the position of Verify in the
marketplace.
About Location Sciences Group PLC:
Location Sciences is the pre-eminent global location
verification provider to the $160 billion digital advertising
industry. Working in partnership with brands, media agencies and
suppliers to reduce ad-wastage and improve the effectiveness of
location-based advertising campaigns.
The digital advertising market-place remains unregulated and
un-monitored, with an estimated $19 billion wasted on ad-fraud in
2018. Location Sciences has developed Verify, the world's first
independent location verification product. Utilising sophisticated
machine learning and pattern recognition technologies, Verify
detects location ad-fraud and shines a light on location data
inaccuracy with the aim of bringing back integrity, transparency
and trust to the market place.
Rule 26 website: www.locationsciencesgroup.ai
Verify website: www.locationsciences.ai
LinkedIn: https://www.linkedin.com/company/locationsciences
Twitter: @LocationSci
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END
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December 14, 2020 02:00 ET (07:00 GMT)
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