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Facebook employee warned it used ‘deeply wrong’ ad metrics to boost revenue

Facebook employee warned it used ‘deeply wrong’ ad metrics to boost revenue


The ‘potential reach’ metric counted fake and duplicate accounts

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Photo by Amelia Holowaty Krales / The Verge

Some Facebook employees believed they were promoting “deeply wrong” data about how many users advertisers could reach, and one warned that the company had counted on “revenue we should have never made” based on its inflated numbers, according to recently unsealed internal emails.

The Financial Times reported the statements today based on a newly unredacted filing from a 2018 lawsuit in California. The lawsuit claims that Facebook knowingly overestimated its “potential reach” metric for advertisers, largely by failing to correct for fake and duplicate accounts. The filing states that Facebook COO Sheryl Sandberg acknowledged problems with the metric in 2017, and product manager Yaron Fidler proposed a fix that would correct the numbers. But the company allegedly refused to make the changes, arguing that it would produce a “significant” impact on revenue.

“It’s revenue we should have never made given the fact it’s based on wrong data,” Fidler responded in an email. Another employee added that “the status quo in ad reach estimation and reporting is deeply wrong.”

Facebook has argued that the “potential reach” metric is only a free tool that doesn’t directly reflect how much a campaign will cost or who it will reach. However, the suit cites an internal Facebook statement calling potential reach “arguably the single most important number in our ads creation interfaces” since advertisers relied on it to design ad strategies and budgets.

Facebook told the Financial Times that the latest “allegations are without merit and we will vigorously defend ourselves,” and it objected to how the filing characterized the messages. “These documents are being cherry-picked to fit the plaintiff’s narrative. ‘Potential reach’ is a helpful campaign planning tool that advertisers are never billed on. It’s an estimate and we make clear how it’s calculated in our ads interface and Help Center,” said spokesperson Joe Osborne in a statement to The Verge.

It’s not the first time Facebook has been accused of hurting businesses by inflating its numbers. The company previously faced a suit that claimed it greatly and knowingly overestimated how much video users were watching — an error critics say pushed online media publications toward a doomed “pivot to video” strategy, resulting in layoffs and enervated newsrooms. Facebook settled that suit in 2019.

Update 3:30PM ET: Added statement from Facebook.