LinkedIn has been hit with two lawsuits by advertisers over allegedly inflated ad metrics.
“LinkedIn has systematically inflated ad metrics in its favor, which has enabled it to overstate the quality of its audiences, the quality of its ad inventory, and the engagement from its audiences,” tech company TopDevz and recruiting platform Noirefy allege in a class-action complaint filed last week in U.S. District Court for the Northern District of California.
The companies allege that the incorrect advertising metrics enabled LinkedIn “to collect an inflated price from advertisers.”
Realtor Drew Krisco, along with software and mobile app developer Livly, brought a similar class-action complaint against the company on November 20.
“Advertisers pay extortionary amounts to reach target audiences and rely on platforms like LinkedIn to be honest brokers in how they track, monitor, and charge for those ads,” Krisco and Livly allege in their complaint. “While advertisers have certain tools available to them to track their own ads, certain information can only be known and conveyed by LinkedIn itself, leaving advertisers in a vulnerable position to act in blind reliance on LinkedIn’s own metrics and reporting.”
LinkedIn said last month that it had discovered two “measurement issues” that “may have overreported some Sponsored Content campaign metrics for impression and video views.”
The company, which says it has now fixed the issues, reported that it discovered the measurement problem in August. LinkedIn also said the incorrect metrics potentially affected more than 418,000 customers, and that it will credit the accounts of any advertisers that were affected.
But the advertisers suing the company say the inflated ad metrics led them to purchase more ads -- and pay more for them -- than if the metrics had been accurate.
“Plaintiffs would not have bought as much advertising services if LinkedIn had not disseminated inflated metrics and would have paid a lower price for the advertising services they did purchase,” Krisco and Livly allege in their complaint.
Likewise, TopDevz and Noirify claim their complaint that the incorrect metrics were likely to dupe advertisers into thinking their ads “received greater engagement than they actually did,” which resulted in higher prices for campaigns.
LinkedIn isn't the only company to be sued over allegedly incorrect measurements. Facebook recently agreed to pay $40 million to settle claims that it inflated video metrics by up to 900%.