Several Facebook advertisers are pressing to move forward with a class-action complaint accusing the company of duping them by inflating the possible reach of their ads.
“Advertisers ... flock to Facebook’s platform because of its supposedly 'unmatched' potential reach,” a group of advertisers including Danielle Singer, who owns the Kansas-based business Therapy Thread, says in papers filed Thursday. “This foundational representation is false.”
Singer and the others are urging U.S. District Court Judge James Donato in the Northern District of California to reject Facebook's request to dismiss the lawsuit.
The dispute dates to last August, when Singer alleged that Facebook induced advertisers to purchase ads -- and pay higher prices for them -- by inflating the number of users the ads could reach. Singer alleged that she purchased $14,000 in ads on Facebook between October of 2013 and April of 2018. After she sued, three other advertisers joined the case.
The complaint draws on reports by outside groups, including the industry organization Video Advertising Bureau, as well as a survey commissioned by the plaintiffs. The Video Advertising Bureau reported in 2017 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.
Facebook has asked Donato to dismiss the complaint, arguing that estimates about campaigns' reach are not guarantees, and that the estimates don't affect billing.
“Advertisers are charged based on specified outcomes such as website conversions, clicks, or impressions an ad receives,” the company wrote in papers submitted to Donato in February. The company adds that pricing depends on Facebook's auction system.
Facebook also says it discloses that potential reach estimates aren't based on census data or third-party data. “It is simply not plausible that plaintiffs would not have placed ads on Facebook if only they had known the potential reach estimates did not match census and survey data about Facebook users, given the conspicuous Facebook disclosures,” the company argues.
But Singer and the others say they should be able to proceed with their claims.
“Facebook argues it should be free to inflate its core metric. The court should reject this extraordinary argument,” they argue in their new court papers.
Donato is scheduled to hold a hearing in the case on May 16.
Facebook 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.