Facebook allegedly inflated its advertising audiences
All of Facebook's platforms are expected to reach 96.6 billion net advertising revenue in 2021, or 24.4% of the global market.
AP - Jeff Chiu
Text by: RFI Follow
3 min
Mark Zuckerberg's firm knew its estimates of user numbers were unreliable and artificially high, but ignored the issue in order to generate more advertising revenue, companies say, according to legal documents released Wednesday. February 17.
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“
These are revenues that we should never have had because they were based on false data.
So says a Facebook employee in an internal email.
The American social media giant has been facing a group lawsuit since 2018, launched by a company.
The plaintiffs claim that the leaders of the platform knew its actual measurement of
"
potential reach
"
overestimated the potential audience for advertising campaigns, but did not seek to rectify the situation so as not to lose revenue.
The California-based company derives the overwhelming majority of its revenue from the sale of targeted advertising space to advertisers.
Prices vary based on many criteria, starting with the number of users likely to see the campaign.
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Read also: Tech giants are accumulating gains in the midst of the Covid-19 crisis
Employees prevented from fixing the problem
“
Facebook knew its 'potential reach' was bloated and misleading.
[...] Facebook knew that the problem was largely caused by fake accounts and duplicates.
[...] Executives prevented employees from repairing the problem because they thought that "the impact on the incomes (would be) significant"
", detail the plaintiffs.
They cite the "potential reach" official citing revenue that Facebook "
should never have had
" and another wondering "
how long we can get away with overestimating [audience] reach
" .
“
These documents were selected to match the story told by the complainant.
"Potential reach" is a campaign planning tool that is never used to bill advertisers,
"responded Joe Osborne, a spokesperson for Facebook.
This is an estimate and we explain.
"
Lawsuits by federal authorities in Washington
In March 2019, the social network changed the measure of potential reach, which is no longer based on active users but on the number of people who saw an advertisement on one of the firm's products during the 30 days. elapsed.
In 2020, the group achieved nearly 86 billion dollars in turnover, and generated more than 29 billion in profits, up 58%.
According to eMarketer, the platform family is expected to reach 96.6 billion net advertising revenue in 2021, or 24.4% of the global market.
Google, the number 1 in this market, and Facebook, the number 2, face lawsuits from the federal authorities for abuse of a dominant position.
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Read also: Facebook challenges Australia by blocking news content
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