Facebook inflated metrics to increase ad revenue

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Officials knew that Facebook was using “deeply wrong” metrics for social media ads. More than that, the company was doing it on purpose with the intention of increasing revenue.

The Financial Times information is based on a lawsuit filed in 2018. The document states that the company would have intentionally overestimated the “potential reach” metric for advertisers by not excluding false or duplicate accounts.

With snippets of internal emails, the action reveals that Sheryl Sandberg, Facebook’s chief operating officer, acknowledged the problem with the metric in 2017. Then, product manager Yaron Fidler requested a correction.

However, the company refused to make the changes. The action document highlights that the argument presented in the messages is that the requested changes “would have a significant impact on revenue”.

During the process, Facebook defended itself and argued that the ad estimation metric is just a free tool. Because of this, it does not accurately reflect the cost of a campaign or who it will reach.

However, the document’s rapporteurs cite an internal statement on Facebook Ads’ “potential reach”. In it, the company classifies it as “arguably the most important number in our ad creation interface”.

Facebook defends itself

In response to the Financial Times article, Facebook said the latest “allegations are without merit and we will defend ourselves vigorously”.

This is not the first time that the technology company has been accused of harming other companies by increasing its numbers. In 2018, it was sued for inflating and overestimating data about the reach of videos watched by users.

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