Facebook Ad Reach Data Error: Revenue Over Accuracy

Internal Facebook Emails Reveal Years of Ad Reach Concerns

Newly unsealed court documents indicate that Facebook’s Chief Operating Officer, Sheryl Sandberg, was aware of issues with a free ad planning tool as early as 2017. This tool provides marketers with estimates of potential campaign reach on the platform.

Revenue Concerns Overshadowed Accuracy

A Facebook product manager for the “potential reach” tool cautioned that the company was generating revenue from “wrong data.” This revenue, the manager stated, “should never have” been earned.

Lawsuit Alleges Deceptive Practices

The documents relate to a U.S. class action lawsuit filed in 2018. The suit alleges that Facebook knowingly included fake and duplicate accounts in its “potential reach” metric, thereby deceiving advertisers.

Acknowledged Issues and Subsequent Changes

Facebook disputes the allegations but has admitted to inaccuracies in the “potential reach” metric since 2016. Changes to the tool’s functionality were implemented in 2019.

Internal Discussions on Overestimation

Previously redacted documents revealed a Facebook employee questioning “how long can we get away with the reach overestimation?” Sections pertaining to Sandberg and other executives were initially withheld from public view.

Sandberg’s Awareness Confirmed

The newly unsealed documents demonstrate that Sandberg “acknowledged in an internal email she had known about problems with Potential Reach for years” dating back to fall 2017.

Revenue Impact Prevented Fixes

Facebook repeatedly dismissed internal proposals to address the inflation of estimates caused by fake and duplicate accounts. Concerns about the impact on revenue were cited as the primary reason for inaction.

Potential Reach Reduction and Terminology Debate

In early 2018, Facebook projected a 10% decrease in potential reach if duplicate accounts were removed. Management also rejected a suggestion to replace “people” and “reach” with the more precise term “accounts,” arguing that “people-based marketing was core to Facebook’s value proposition.”

Product Manager’s Warning Ignored

Yaron Fidler, a product manager for “potential reach,” proposed a fix that would have lowered the tool’s numbers. His proposal was rejected by metrics leadership due to its potential “significant” impact on revenue. Fidler responded that the revenue was improperly earned given the flawed data.

Initial Disclosure Through Metrics FYI

In 2016, following disclosures of inflated video view times, Facebook launched “Metrics FYI” to provide updates on metric enhancements. This channel included a vague disclosure regarding accuracy issues with “potential reach,” stating improvements were being made to sampling and extrapolation methodologies.

Limited Detail in Disclosure

The December 2016 blog post lacked specifics about the nature of the accuracy problems, resembling a typical Facebook public relations response during a crisis.

Allegations of Deflection Tactics

The class action suit claims that instead of implementing fixes, Facebook “developed talking points to deflect from the truth.”

Changes to Ad Tool in 2019

In March 2019, Facebook announced changes to the ad tool, basing estimated potential reach on users shown ads within the past 30 days, rather than active users.

Metric Still Doesn't Reflect True Audience

Litigants argue that these changes do not fully resolve the issue of the metric failing to accurately represent the potential audience who could view the ads.

Ad Reach Discrepancies with Census Data

A 2017 analyst report revealed that Facebook’s ad platform claimed to reach a significantly larger number of users within specific age groups in the U.S. than indicated by official census data.

Facebook’s Explanation and Ongoing Improvements

Facebook stated that audience reach estimates are based on various factors, including user behavior, demographics, and location data. The company also asserted that these estimates are “not designed to match population or census estimates” and that they are “always working to improve our estimates.”

Facebook’s Response to Unsealed Documents

In response to the latest unsealed documents, a Facebook spokesperson stated, “These allegations are without merit and we will defend ourselves vigorously.”

Second Statement Emphasizes Tool’s Purpose

Update: A subsequent statement from Facebook clarified that “Potential reach” is a campaign planning tool, not a billing metric, and that its estimated nature is clearly communicated to advertisers.

Recurring Issues with Ad Metrics

Problems with self-reported ad metrics have been a consistent challenge for Facebook.

Conversion Lift Tool Error

Last year, Facebook disclosed a code error in its “conversion lift” ad tool, which resulted in inaccurate calculations of sales generated from ad impressions.

Skewed Data and Advertising Spend

This “technical problem” led to skewed data for advertisers, potentially influencing their decisions regarding advertising expenditure on the platform.