Facebook knowingly overestimated its potential reach metric for advertisers
Remember when Mark Zuckerberg battled the Winklevoss Twins to determine who created Facebook? The legal process uncovered messages sent by Zuck himself in 2004 that said he wanted to “fuck them, probably in the ear.” Nice, right? Well, based on a recent drop of unredacted court filings, it looks like Facebook’s CEO has been doing the same ‘actions’ to advertisers.
On 18 February 2021, the Financial Times reported statements from some Facebook employees who believed they were promoting “deeply wrong” data about how many users advertisers could reach, and one warned that the company had counted on “revenue we should have never made” based on its inflated numbers, according to internal emails.
This information came from a newly unredacted filing from a 2018 lawsuit in California, which claims that Facebook knowingly overestimated its “potential reach” metric for advertisers, largely by failing to count out fake and duplicate accounts. The filing states that Facebook’s COO Sheryl Sandberg acknowledged problems with the metric in 2017, and product manager Yaron Fidler proposed a fix that would correct the numbers. Still, the company allegedly refused to make the changes, arguing that it would produce a “significant” impact on revenue.
“It’s revenue we should have never made given the fact it’s based on wrong data,” Fidler responded in an email. Another employee added that “the status quo in ad reach estimation and reporting is deeply wrong.” In response, Facebook has argued that the “potential reach” metric is only a free tool that doesn’t directly reflect how much a campaign will cost or who it will reach.
In one of the filing’s many gems, Facebook told advertisers it could target 100 million people aged between 18 and 34 years old in the US even though there are only 76 million people in that age group.
However, the suit cites an internal Facebook statement calling potential reach “arguably the single most important number in our ads creation interfaces” since advertisers relied on it to design ad strategies and budgets. Facebook told the Financial Times that the latest “allegations are without merit and we will vigorously defend ourselves,” and it objected to how the filing characterised the messages.
“These documents are being cherry-picked to fit the plaintiff’s narrative. ‘Potential reach’ is a helpful campaign planning tool that advertisers are never billed on. It’s an estimate and we make clear how it’s calculated in our ads interface and Help Center,” said spokesperson Joe Osborne in a statement to The Verge.
As we all know by now, this is not the first time Facebook has been accused of hurting other businesses by inflating its own numbers. The company previously faced a suit in 2016 that claimed it greatly and knowingly overestimated how much video users were watching (an error that critics say pushed online media publications toward a doomed ‘pivot to video’ strategy) resulting in layoffs and weakened newsrooms. Facebook settled that suit in 2019.
At the end of 2020, Facebook told advertisers that its “conversion lift tool” (which measures ad performance) overestimated campaign results. While Facebook has largely avoided major repercussions for its activities, it looks like the tide is turning.
