The legal troubles for Facebook continues.
In light of dodgy viewership metrics and unsupported ad reach claims, the marketing industry is (finally) standing up to the tech giant. Previously this year we saw several marketers sue Facebook over their “misrepresentation” of video ad viewership.
That was followed by a new complaint added to the suit that alleges intentional fraud on the part of Facebook.
Now, another party heard from.
“Facebook has allegedly misled advertisers on its platform by demonstrating it has a far larger audience size in U.S. cities and states that it actually has, according to a lawsuit filed last week by a Kansas-based aromatherapy fashionwear business owner,” writes Connor Stringer in Whats New In Publishing.
“The lawsuit from owner Danielle Singer alleges that Facebook’s purported ‘Potential Reach’ figures for the 18-to-34 age demographic in all 50 states exceeded the actual population of 18-to-34-year-olds who use Facebook,” Stringer explains. “Yes, that’s right – Facebook has allegedly promised a Potential Reach figure that is far greater than the actual population of 18-to-34-year-olds who use Facebook.”
Not surprising, given the public outcry last fall when the marketing world realized that Facebook math just doesn’t add up. At the time, it was easier to swallow the explanation that the number of fraudulent or duplicate accounts skewed the numbers – but this newest lawsuit alleges something far worse.
“The lawsuit claims to have received testimony from former Facebook employees confirming the inflation,” Stringer writes. “One anonymous employee said the Potential Reach number was ‘like a made-up PR number.’”
Singer, who has spent upwards of $14,000 on Facebook ads across the U.S., was apparently fairly diligent in creating actual reach estimates based on census data that shows that Facebook’s numbers aren’t just a little off – they are off more than 200%.
Surely there is some level of ad fraud in the mix – but this is basic math and data research that Singer compiled, certainly not outside the reach of a company with resources in the stratospheric range.
For publishers, Stringer notes the obvious: “Whilst an ad fraud scandal is the last thing Facebook needs, coming so close after the fake news and privacy debacles, it nevertheless should be something publishers consider when evaluating the companies [sic] latest Predicted Reach figures. At least until the Singer lawsuit is settled either way.”
The lawsuit is seeking class action status for any companies that bought ads on Facebook since 2013, with a “quasi-contract claim for restitution.” If this goes through, we could see some drastic changes in the digital ad duopoly as the curtain is pulled back on one of the key players.
Meanwhile, a key age demographic for the social giant is turning away in droves – because these digital natives know exactly how Facebook works.
“According to two new studies from Pew Research that each polled 4,594 Facebook users, young people are the most likely users to abandon the social network,” writes Mark Wilson in Fast Company. “And at the same time, young people are actually the most likely group to use Facebook’s privacy settings and understand how the company’s algorithmic news feed works.
“In other words,” Wilson continues, “while this connection is correlational rather than causal, the demographic who understands Facebook the best is opting to ditch the service most often. At the same time, the older population sticking loyally with Facebook is, unfortunately, the same age as people who tend to know less about how it works.”
There’s power in knowledge, and Facebook knows this. That’s why these kinds of public exposes of misrepresentation at best, outright fraud at worst, can be incredibly damaging to their brand. And while they’ve been making noise about being more transparent with their privacy settings, it’s probably too little too late.
“But such tools may not be convincing people who are concerned about the platform’s practices to stay,” Wilson continues. “And the older people who stick with the platform may need more help understanding how its News Feed and other features really work. As the most lucrative users–those advertiser-coveted young people–are most likely to flee first, the only way to fix Facebook may be to actually fix Facebook.”
What a novel idea.