Court documents reveal Facebook intentionally overestimated audience reach numbers to...

Cal Jeffrey

Posts: 2,910   +762
Staff member
A hot potato: Facebook has a checkered history when it comes to advertising. From selling user data to the highest bidder to lying about how many users advertisers can reach in its videos. Now it looks like they have been at the latter only regarding general audience numbers.

Recently unsealed court documents reveal that Facebook senior executives have been knowingly overstating customer reach to advertisers for years. The filing contains records of emails and other internal communications between product managers and executives, acknowledging that they grossly exaggerated reach estimates.

The Financial Times reports that the documents are from a class-action lawsuit filed in 2018 claiming Facebook knew that its potential audience size was overinflated but did nothing to correct it. The court previously redacted many parts of the filing. Digital Content Next filed a lawsuit to have the documents unsealed, and a judge sided with the organization on Thursday revealed the details.

One product manager allegedly suggested making adjustments to correct the reach metrics, but executives shot the suggestion down, stating that the revenue impact would be too "significant." The manager rebutted, saying that "it's revenue we should have never made given the fact it's based on wrong data."

"[The] status quo in ad reach estimation and reporting is deeply wrong," said another manager questioning the ethics of misleading advertisers who use reach in their budgeting metrics. "My question lately is: how long can we get away with the reach overestimation?"

The lawsuit claims that the overstated numbers include fake and duplicate Facebook accounts. In some instances, users in a region exceeded the population of that area.

Facebook's defense is that its reach metrics are only estimations and that advertisers are only charged based on actual clicks. However, the argument falls somewhat flat when taken with the company's admission that reach is "arguably the single most important number in our ads creation interfaces."

Plaintiff lawyers in the case claim, "Facebook knew for years its potential reach was misleading and concealed that fact to preserve its own bottom line."

Although the judge has not ruled on the case, the evidence as presented appears damning.

"[These] allegations are without merit, and we will vigorously defend ourselves," said a Facebook spokesperson.

This is not the first time the social media giant has been caught lying about its reach. In 2016, advertisers sued Facebook for overestimating video views by as much as 80 percent. The Wall Street Journal notes it settled that lawsuit in 2019 for $40 million.

Image credit: Mehaniq

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Uncle Al

Posts: 8,001   +6,775
Facebook says estimates don't matter when advertisers are paid per click

Oh I can't wait to hear how a judge will react to that statement ..... especially a Federal Judge ....
 

Vrmithrax

Posts: 1,577   +628
That's some pretty cool logic for you. Estimates might sway you on whether or not to invest in the advertising for a platform, but estimates don't matter since you are paid per click - even if the number of potential clicks is much smaller than the number they used to entice you.

Isn't that essentially a variation of a bait and switch tactic?
 

Shadowboxer

Posts: 1,447   +1,043
Facebook needs putting in its place. This is bad but no where near as bad as threatening the Australian government, cutting off news to citizens. Who the hell do they think they are?
 

Mister_K

Posts: 2,054   +738
It was Facebook that cut all Australian links a short while ago.

Ah ok, for some reason the article the other day I thought was about Google. Coming to think of it, I think that was more about search stuff and Australia wanting to get paid for it or something.
 

Puiu

Posts: 4,485   +3,320
TechSpot Elite
Ah ok, for some reason the article the other day I thought was about Google. Coming to think of it, I think that was more about search stuff and Australia wanting to get paid for it or something.
It was about news links and articles. News outlets want to be paid for the links posted on social media and google. Google is making a deal with some of them and facebook is refusing. The links removal was a threat issued by facebook towards Australia.
 

gdavid65

Posts: 17   +8
Probably just the same their total "active audience" is the billions, yet actual is probably nothing near that, due to zombie and fake accounts. They're probably over-inflating all of that too.

Get Zucked!
 

Dimitrios

Posts: 763   +592
"The lawsuit claims that the overstated numbers include fake and duplicate Facebook accounts. In some instances, users in a region exceeded the population of that area." Gee, THAT sounds awfully familiar.

Democrat strategery 101?