Facebook has asked a federal judge to dismiss a lawsuit alleging that the company bilked advertisers by inflating the possible reach of their ads.
The lawsuit, brought earlier this year by business owner Danielle Singer, alleges that Facebook induced advertisers to purchase ads, and pay higher prices for them, by inflating the number of users the ads could reach. Singer, who owns the Kansas-based business Therapy Threads, alleged in a class-action complaint that Facebook's estimates of audience reach in every U.S. state were higher than the states' populations according to the U.S. Census Bureau.
But Facebook counters its estimate of possible audience size -- a metric it calls “potential reach” -- is only a planning tool aimed at enabling advertisers “to narrow or broaden an ad’s target audience.”
“Facebook provides advertisers with advertising campaign planning tools called 'Potential Reach' and 'Estimated Daily Reach,' which ... are 'estimations' that “don’t represent actual campaign reach or campaign reporting,” the company argues in papers filed this week with U.S. District Court Judge James Donato in San Francisco.
“Its name alone -- Potential Reach -- undercuts plaintiffs’ suggestion it was misleading,” the company argues.
Facebook adds that its disclosures to advertisers provide that the “potential reach” figure “is only an “estimation of how many people are in an ad set’s target audience” and not “intended to align with third party calculations or population census data.”
Singer alleges in her complaint that Facebook claimed in 2017 that its ads could potentially 1.9 million people in Chicago between the ages of 18 and 34, but that Census data showed a population of only 808,785 people in that age range in Chicago.
She said a survey she commissioned shows that 59% of 18- to-34-year-olds in Chicago have Facebook accounts, which would mean that Facebook ads potentially reach only 500,000 18- to-34 year-olds in Chicago.
Her complaint also draws on information allegedly provided by ex-Facebook employees. One of the former employees, identified in court papers as "Confidential Witness 1," said the company's "potential reach" statistic is "like a made-up PR number," according to the complaint.
Another ex-employee, "Confidential Witness 3," allegedly "stated that Facebook was not concerned with stopping duplicate or fake accounts in calculating potential reach."
The company is also facing a separate lawsuit over allegations that it inflated video metrics. That earlier matter, which dates to 2016, is pending before U.S. District Court Judge Jeffrey White in Oakland, California.