However, the Securities & Exchange Commission temporarily froze the assets of Adbot and its parent, the Chicago Partnership Board last week, after CPB owner James Frith, was cited in a civil suit brought by the federal agency.
The suit alleges that Frith diverted $3.4 million in funds away from CPB customers for personal and professional uses, including Adbot, which launched this year. A hearing scheduled for today will determine what will happen to Adbot’s assets in the short term.
“We’re still taking orders. We’re still serving ads. We’re still doing business,” said Margaret Raye, manager of writing, research and production at Adbot. The company’s scheduled ad auction in January is still on track, as well as its plan to seek venture capital next year.
As long as the company can continue to serve ads to sites, advertisers will not find themselves in situations in which they have paid for ads that never run. In addition, media buyers typically wait to pay media until after a schedule has run.
Publishers could potentially lose added revenue if Adbot had to stop service, because Adbot sells sites’ extra ad inventory. However, there are other players in the online ad auction category, such as San Francisco-based Flycast Communications.
Some customers of Adbot include Amazon.com, which has participated in previous auctions. Quote.com is a publisher that has sought the services of Adbot to auction off its unclaimed ad inventory.
–with Bernhard Warner