ComScore Replaces CEO And CFO Amid Accounting Stir

Gian-Fulgoni-comScoreComScore replaced its CEO and rearranged its leadership team Wednesday amid an internal investigation of its accounting practices that started shortly after comScore and Rentrak completed their merger in February.

Because of the ongoing investigation, which is being conducted with the help of independent counsel, comScore hasn’t reported Q1 or Q2 revenue.

Co-founder Gian Fulgoni will serve as CEO, replacing Serge Matta. In a call with investors Wednesday, Fulgoni stressed his experience in the industry, including the fact that he was CEO of IRI until 1998.

“The first half of the year was not business as usual because of the distraction of the investigation,” Fulgoni said. The executive rearrangements are part of the company’s attempt to regain focus.

Bill Livek, the CEO of Rentrak pre-merger, will move from serving as executive vice chairman and president to a day-to-day role overseeing comScore’s TV, cross-platform and movie measurement businesses.

Another former Rentrak exec, David Chemerow, also will take on on a different role. He will switch out of his CRO role to become CFO. At Rentrak he was CFO and COO before the merger.

Fulgoni also provided an update on comScore’s business. The revenue estimate for the first half of the year – not taking into account the outcome of the investigation – would be in the $214 million to $218 million range, with nonmonetary revenue of about $10 million. That “disappointing” figure is $20 million under what the company projected, he said.

The investigation of comScore’s accounting kicked off after the company “received a message regarding certain potential accounting matters,” comScore said in a March press release.

Most of the company’s revenue growth in recent quarters was coming from nonmonetary revenue, a strategy The Wall Street Journal theorized it might be using to game revenue growth. That nonmonetary revenue came from barter agreements, where comScore received valuable data from partners it recorded as revenue by estimating the data’s worth.

The accounting investigation has taken resources away from the integration of the comSore and Rentrak products.

The uncertainty is also affecting sales. The company also saw misses in its sales pipeline because of mergers and acquisitions in the local TV and digital space, Chemerow said, which led clients to “freeze or push out timing.”

ComScore also acknowledged that its mobile measurement panel isn’t scaling up fast enough. Especially in some non-US markets, consumers skipped desktop and went straight to mobile, making it important to develop large mobile panels. “Data [is] flowing in slower than expected,” Chemerow said.

From there, comScore focused on the positives in the business. It sees momentum in its advertising measurement business, which tracks the effectiveness of advertising. Agency holding company WPP, for example, is both a shareholder and a big proponent of the company’s merger.

ComScore wants to ride the wave of audience buying by providing data for targeting. It can help advertisers extend the reach of campaigns to “digital-only cord cutters,” for example, because of its cross-platform measurement abilities.

ComScore is tapping into the desire for alternate currencies for buying. Dish Network, for example, uses comScore data as its currency for addressable buys. “Increasingly, clients are beginning to use comScore information as currency,” Livek said.

ComScore's stock rose 5% immediately following Wednesday’s announcement.

 

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