Is Facebook Telling Lies To Advertisers?

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(By Spike Santee) Here’s another story that questions the veracity of social media advertising claims. Danielle Singer is a psychotherapist at Therapy Threads, a natural aromatherapy fashion and self-care products company in Kansas City. Singer has filed a lawsuit against Facebook accusing the company of bilking advertisers by inflating the number of people Facebook ads could reach.

“Based on publicly available research and plaintiffs’ own analysis, Facebook overstates the potential reach of its advertisements,” Singer alleges in a class-action complaint filed in U.S. District Court for the Northern District of California.

Singer says she spent more than $14,000 on Facebook ads between October of 2013 and April of 2018.

She alleges that Facebook induced advertisers like herself to purchase ads — and to pay higher prices for them — by “vastly” inflating the number of active users the ads could reach. The complaint claims that Facebook violated a California business law.

The complaint draws on reports by outside groups, including the industry organization Video Advertising Bureau, as well as a survey commissioned by the plaintiffs. The Video Advertising Bureau reported last year that Facebook’s estimates of audience reach in every U.S. state were higher than the states’ populations according to the U.S. Census Bureau.

Singer specifically refers to Chicago in the complaint. She alleges that Facebook claimed in 2017 that its ads could potentially reach 1.9 million people in Chicago between the ages 18 and 34, but that Census data showed a population of only 808,785 people in that age range in Chicago.

Singer adds that a survey she commissioned shows that 59% of 18-to-34 year-olds in Chicago have Facebook accounts. The upshot, she alleges, is that Facebook ads potentially reach only 500,000 18-34 year-olds in Chicago.

The complaint also draws on information allegedly provided by ex-Facebook employees. One of the former employees, identified in court papers as “Confidential Witness 1,” said the company’s “potential reach” statistic is “like a made-up PR number,” according to the complaint.

Another ex-employee, “Confidential Witness 3,” allegedly “stated that Facebook was not concerned with stopping duplicate or fake accounts in calculating potential reach.”

Singer is seeking monetary damages, as well as an order requiring Facebook to hire outside auditors and to remedy any problems found by the auditors.

Last year, Facebook said its reach estimates were based on many factors, and were not “designed to match population of census estimates.”

The company is still facing a separate lawsuit over allegations of inflated video metrics. That earlier matter, which dates to 2016, is pending before U.S. District Court Judge Jeffrey White in Oakland, California.

Social media advertising presents many pitfalls for advertisers looking for the Holy Grail of advertising accountability. Social media advertising is especially ripe for fraud and abuse. Software robots roam social media with the sole purpose of pretending to be human beings looking at Internet display ads to drive up reach and costs you more money. You can’t tell if a real person actually looked at your display ad or if you are paying for “non-human” interaction with your ad.

Before you waste any more of your hard-earned money on Facebook or Google AdWords, visit with a local radio advertising representative about getting real, measurable results for your advertising dollar.

When you advertise on local radio, the advertising metrics come from an independent third party, The Nielsen Company. There are no fake accounts on radio to drive up the cost of your advertising. Radio advertising is real people talking to other real people in your community about your business.

Most consumers listen to their “favorite” radio station because they “love” the music or the personalities. There is a relationship between the listeners and the radio station that is based on trust.

Instead of putting your advertising in a minefield of social discourse, fake news, and hate speech, put your advertising is a place where people you can trust are telling their friends about your business, the way you want, in an honest and forthright manner that attracts and retains new customers.

Spike Santee is the author of The Four Keys to Advertising Success and the president of SpikeSantee.com. Contact Spike at (785) 230-5350.

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