- A judge did not edit parts of a Facebook lawsuit that said executives knew an ad metric was inflated.
- Executives ignored employees’ requests to fix it to avoid “significant” sales success, the suit said.
- Potential reach, the metric in question, shows advertisers a possible audience size.
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Facebook executives have known for years that their “potential for each” advertising metric has been inflated and overruled an employee warning to adjust it to avoid a revenue impact, plaintiffs in a lawsuit against the social media giant argued in a lawsuit not drafted.
On Wednesday, a U.S. District Court judge in northern California revealed excerpts from a previously deleted court document as part of a class action lawsuit on behalf of DZ Reserve and other participating plaintiffs that was filed against Facebook in 2018. The lawsuit alleges the social media giant has inflated its potential reach metric to deceive advertisers.
The newly revealed sections claim that Facebook’s chief operating officer, Sheryl Sandberg, acknowledged problems with the potential reach metric in an internal 2017 email. Advertisers “often trust” the metric – which shows the number of people reachable – when making purchase decisions, states the action. But officials said the metric actually measures the number of accounts, which includes duplicate or fake accounts, which can be misleading.
A product manager proposed to change the metric to reflect the number of potentially reachable accounts, not people, but Facebook’s leadership team rejected the idea because it would have a “significant” impact on revenue, the document said. The suit claims that Facebook found that removing duplicate or fake accounts from the total number would cause a 10% drop in potential reach numbers.
The official who proposed the correction said: “It is a recipe that we should never have obtained, since it is based on erroneous data,” according to the document. Other Facebook employees also said the number was misleading.
“These documents are being handpicked to fit the plaintiff’s narrative,” Facebook spokesman Joe Osborne said in an emailed statement to Insider. “‘Potential reach’ is a useful campaign planning tool that advertisers are never charged for. It is an estimate and we make it clear how it is calculated in our ads interface and Help Center.”
Two years ago, the company adjusted the metric for potential reach, FT reported. Instead of calculating the number of active users displayed in an ad in the previous 30 days, Facebook determined the metric by calculating the number of users who met the advertiser’s criteria in that period, the report said. The false and duplicate accounts remained at the total number, however, claimed the author.
The company previously said that advertisers pay for actual ad impressions and clicks, not the metric of potential reach, the Financial Times reported. The social media giant has been criticized for its metrics before. In 2019, Facebook solved a lawsuit after revealing that it had inflated the time of displaying video ads because of an error in the calculation of the metrics, reported The Wall Street Journal.