Fighting Back: Marketers Allege Intentional Fraud by Facebook

It’s been more than two years since Facebook was publicly called out for dodgy video viewership metrics. In the months that followed, speculation was rife that the “mistakes” were intentional, in an attempt to bolster their “pivot to video” initiative for brands by faking video demand.

The marketing industry didn’t take it lying down. As Wendy Davis reports in MediaPost, “Several marketers, including LLE One (which does business as Crowd Siren and Social Media Models), subsequently sued the company. They argued that the misrepresentations led them to believe that Facebook’s video ads were more valuable than they actually were, resulting in inflated prices.” 

Now, Davis reports that a new complaint added to the suit alleges intentional fraud on the part of Facebook.

“The new complaint contains large swaths of blacked-out text, making it difficult to determine what specific information forms the basis of the fraud allegations,” Davis writes. “But in a publicly available passage of the class-action complaint, the marketers refer to Facebook’s alleged ‘longstanding reckless indifference to the metrics’ accuracy.’”

Do the plaintiffs have ground to stand on with this? After all, digital advertising is an industry in its infancy; could this be just a “learning by fire” situation as platforms grapple with viewability issues? Not according to the complaint.

“The wide disparity between the actual average viewership and Facebook’s reported metrics should have been corrected immediately,” the marketers write in the newly amended complaint, according to Davis. “Facebook either knew that the average viewership metrics it was reporting was false … or reported those metrics recklessly and without regard for their truth.”

This is an important case to follow, as the plaintiffs are seeking monetary damages, including punitive damages, “and an injunction that would force Facebook to hire outside auditors and to “promptly correct any problems or issues detected by these auditors,” Davis reports.

The video content bubble was poised to pop two years ago, as brands poured money they didn’t have into video production and distribution. At the time I said that publishers and advertisers needed a return to sanity by building a model around quality ads and content that consumers actually want to see. Consumer preference cannot be faked or manipulated. And those who tried are now looking pretty ridiculous with digital gum all over their faces.