Snapchat Accused Of Misrepresenting Growth

Casting a shadow over Snap Inc’s IPO, a former employee has accused the Snapchat parent of inflating its growth figures.

Anthony Pompliano claims to have been fired after less than a month as Snapchat’s head of growth, because he refused to go along with the alleged scheme, according to a lawsuit filed in L.A. Superior Court this week.

“This action arises out of the avarice of the small group of executives at the helm of the social media giant Snapchat,” the lawsuit states.

“Snapchat’s leadership saw Mr. Pompliano as an impediment to their planned IPO because he refused to turn a blind eye to Snapchat’s misrepresentations,” it alleges.

The suit specifically names several Snap executives, including Drew Boller, the company’s vice president of finance; Jill Hazelbaker, its vice president of communications; and Brian Theisen, then its director of business opperations.

Furthermore, Pompliano contests that Snapchat only poached him from Facebook -- where he served a similar role -- to gather proprietary information on its arch-rival.

Post-termination, the suit alleges that Snap has sought to destroy Pompliano’s “career and reputation by waging a smear campaign against Mr. Pompliano, by making false representations concerning the circumstances of his termination.”

Reached for comment on Thursday, a Snap spokeswoman said the allegations are totally without merit.

The Hollywood Reporter broke the story on Wednesday and subsequently published the heavily redacted lawsuit online.

Snap filed for its initial public offering, in mid-November. Expected as early as March 2017, the social darling is hoping to raise upwards of $4 billion at a valuation of $25 billion to $35 billion, according to reports.

A quiet filing isn’t uncommon in Silicon Valley -- particularly when companies have yet to generate a ton of revenue. Twitter took a similar approach in 2013.

Standing in stark contrast to struggling social networks like Twitter, Snapchat is presently thriving. Indeed, despite direct competition from Facebook and other tech giants, the company is positioned for “explosive” growth in ad revenue over the next few years, per eMarketer.

The research firm recently predicted the playful messaging app would generate $366.69 million in ad revenues in 2016 and $935.46 million in 2017.

6 comments about "Snapchat Accused Of Misrepresenting Growth".
Check to receive email when comments are posted.
  1. Ed Papazian from Media Dynamics Inc, January 6, 2017 at 3:21 p.m.

    Of course, I have no way of knowing if the allegations cited are true, however, after the FB and Twitter revelations, wouldn't advertisers all feel a lot better if a truly independent third party "audience" verification and delivery system was in place for digital media. Perhaps just feeling better is not enough. Maybe the time has come to isnist on third party audits. No audit, no ad revenue.

  2. Leonard Zachary from T___n__, January 6, 2017 at 4:22 p.m.

    Ed your idea of 3rd party audits is a Neilsen panel of 40k households for 320M population. More importantly informed people would like to know how these sales figures were allegedly inflated

  3. Ed Papazian from Media Dynamics Inc, January 6, 2017 at 4:54 p.m.

    As those of us who understand research realize, it doesn't take a gigantic and impossible to organize or fund sample to obtain reasonably precise audience estimates for the vast majority of "linear TV" shows. A 100 million home Nielsen panel---which would be a science fiction fantasy---would not produce any more accurate general findings than a 40,000 home panel. All it would do is allow the researchers to break down ratings for the very lowest rated and marginally important shows and for all shows, to provide finely sliced and diced demo breaks--like ratings for every yearly age break---with a great measure of statistical stability. In the real world such precision---attained at absurdly high costs---trillions of dollars---would be collosal overkill. The "super granular" data would have little significance when most shows and telecasts are bundled together in what amounts to volume discount packages, with audience tonnage guarantees only for the entire package, not individual shows or telecasts. Moreover, I can't imagine that even the smallest fraction of advertisers could define their TV audience "targets" in such precise terms---even if the sellers allowed them to buy time that way---which, of course, they won't.

  4. Leonard Zachary from T___n__ replied, January 6, 2017 at 5:07 p.m.

    Voodoo samples with bundles no one wants. Great

  5. Ed Papazian from Media Dynamics Inc, January 6, 2017 at 6:50 p.m.


  6. John Grono from GAP Research, January 6, 2017 at 9:16 p.m.

    Leonard, your lack of undestanding of how the Nielsen Online Ratings is breathtaking.

    Some years ago Nielsen did a deal with Facebook so that not only does the webpage tag ping the Nielsen server (i.e. nothing to do with the panel) to say that the page view count just went up one, but it also pings Facebook to get age/gender and a I think location.

    In essence the 'sample' for the base demographics for a website's traffic is probaby half the population in each country Nielsen operates in.

    The panel is then used to calibrate/validate the Faceook data (not everyone is logged into FB) as well as to study the duplication of audiences across websites.  The process basically converts traffic data into de-duplicated audience data.

    So is that what you think is voodoo?

Next story loading loading..