Lawsuit Claims Facebook Knowingly Misled Advertisers With Exaggerated Reach Numbers

Advertisers on Facebook have always been concerned about how many people their ads could reach, as defined by ‘potential reach’. Recently unredacted documents from a lawsuit against Facebook made an explosive allegation – company executives knew that the platform’s “potential reach metric” was wrongly inflated for years, but refused to change it because they wanted to protect the company’s bottom line.

The Financial Times (FT), which reported on the class-action lawsuit, said it had been ongoing since 2018. According to the documents, a Facebook project manager for potential reach proposed changing the metric in favour of accuracy, but was stymied by his superiors because the “revenue impact” for Facebook would be “significant.”

In response, the product manager apparently told them, “It’s revenue we should have never made, given the fact it’s based on wrong data.” The potential reach metric allegedly includes duplicate or fake accounts.

The documents also claim that Facebook COO Sheryl Sandberg acknowledged the problem in a 2017 internal email. They (the documents) were previously sealed because they were deemed commercially sensitive for Facebook, the FT said.

According to the FT and as expected, Facebook denied the allegations, claiming that, “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.”

Facebook seems to be making lots of headlines recently: a feud with the Australian government, a feud with Apple, and now this.