Ad agency notices dramatic claims about Theranos technology: Part 5

Theranos hired TBWA\Chiat\Day to develop an ad campaign for their blood-testing devices, but some who worked on the account said questions kept come up about the company's claims.
6:18 | 03/16/19

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Transcript for Ad agency notices dramatic claims about Theranos technology: Part 5
Reporter: Now just 28 years old Elizabeth continued to carefully craft her brand. She set her sights on chiat day, the legendary Los Angeles ad company behind iconic campaigns like apple's think different. And 1984. Right off the bat, Elizabeth made quite the impression. Here's to the crazy ones. You'll see why 1984 won't be like 1984. Elizabeth and sunny flew to Los Angeles on a private jet and met with our team members. At that time we were told of the story and her vision for theranos. And it was great. The stature of everything felt very like I don't know like a politician or like royalty was there like we were rolling out the red carpet. The pomp and circumstance around it, it was really like who is this person and what is what is this product? The first thing that you'll if you ever meet Elizabeth that you've noticed is her voice. I'm not in a position to do that. It's extraordinarily deep. It sounded to me like she was a man or a robot or both a man robot and so you were kind of struck so demeanor-wise she carried herself like a highly intelligent person which she is. We thought something really special was going to happen. Reporter: Theranos eventually inked a $6 million retainer with the agency. That's a lot of money for marketing. I'm always wary when people do a lot of marketing. Same thing with office furniture. The offices are too nice. I'm always like hmm I wonder what's going on here. Reporter: The team built out the theranos website and created ad campaigns reminiscent of that other tech giant. There are some similarities to what apple does when you take a look at very minimalistic on white, choice type font. There are definitely some parallels to that. Everything was based on this tiny drop of blood. So we wanted to make that a big portion of the iconography of the brand. One of the lines was goodbye big bad needle and it had a picture of a child with big blue eyes and he had. Just quizzical look on his face you felt the importance of the mission. Reporter: But before the ads went live, chiat day had to confirm that all the assertions theranos was making were in fact true to legally protect themselves. Mike, you sent over this matrix. We had spreadsheets with feedback that we were trying to explain to them. What type of proof that you needed to get this done. Reporter: They say Elizabeth got a little fast and loose with dramatic claims about the technology. I mean there were specific claims like the four-hour claim. You can't say that unless it's four hours. If you want to say hundreds of tests on one single drop that it has to be hundreds of tests on one single drop. It has to be true at the time of publication or you can't you Reporter: Now it was the ad guys -- not just theranos employees -- poking holes in the story and holding them accountable. They told Elizabeth they had to amend the copy eliminating specific, unproven claims and distilling them down to vague catch-alls. And then things got weirder. There are times where she would go dark for a month. Is that typical? No. That is not typical. Not given the ambition and the desire to move quickly and then to be completely unresponsive was odd very odd to us. Reporter: With wellness centers now poised to open in multiple cities, Mike asked an innocent question. I asked, where is the where's the lab in Phoenix because I was curious where it was and. I was told. Oh, we haven't built it yet. It's like but you're doing the tests. How do you do the test then? And this is great. And then it was oh we FedEx them up to Palo alto. Reporter: They'd stumbled on a bombshell. Turns out theranos wasn't going to actually put these devices inside of Walgreens because that would have required fda approval, something they didn't have. Instead they were exploiting a legal loophole and flying the blood samples to a central lab. Mike and I looked at each other and there were two problems with that. One was the speed. Another is, how are you using FedEx to actually carry somebody's blood? It was like whoa wait and especially when you consider what the promise of the of the box was. These things -- it was portable you can run tests real quick. I thought they were just going to be in every store and they were going to do it there. It was my contention that the box didn't exist or that they could manufacturer it. Reporter: It wasn't long before many on the chiat day team were wondering exactly who or what they were really dealing with. I will say I was at one point convinced it was a front for the government. And the reason why is the one of the first meetings I had with her she had said that the box had been field tested in Afghanistan and then you look at her board and you look who is sitting on the board and she would continue to drop you know major political and military names. And it got to a point where like ok maybe this whole thing is some sort of CIA and I mean, and I'm kind of joking but I'm also not joking. I'm like what's going on here. Reporter: Suddenly, with no clear explanation, theranos pulled the plug on chiat day. They were done and chiat was relieved. But the lingering apprehension that Elizabeth and theranos might retaliate against naysayers never really went There's still a part of me that has fear. Is this -- are we being set up? Just because they were -- just very unscrupulous when it when it came to protecting and make sure nobody talked. Reporter: But somebody would. A brave and unlikely whistleblower was about to emerge. There was definitely a culture of fear. I don't know how it started but it was definitely there. Reporter: Meanwhile real people were now potentially at risk. She said I'm so sorry. That's not good. There could be a tumor growing somewhere. It was oz. And you got behind the curtain and you realized, "Wow, there's no wizard."

This transcript has been automatically generated and may not be 100% accurate.

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