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Facebook gets sued for allegedly inflating potential reach

Facebook is in hot water again and has been served up a lawsuit for allegedly misleading advertisers by inflating its audience reach, multiple media reports stated. Danielle Singer, owner of Project Therapy, a small business focusing on aromatherapy, filed a class action suit with the US District Court of Northern California, claiming that Facebook has “overstated” the potential reach of its ads, “vastly inflating” the amount of active users targeted by the ads. She also claimed that Facebook required advertisers to pay higher prices for ads.

Multiple media reports said that Singer had alleged Facebook claimed last year that the potential reach for its ads in Chicago was approximately 1.9 million individuals between 18 and 34 years old. However, census data showed that the number of Chicago residents within that age range was 808,785. A+M has reached out to Facebook for comment.

It comes as no surprise that often Facebook and Google are the go to platforms to reach audiences. In a conversation with A+M, Entropia’s senior partner Prashant Kumar said that Facebook is a media company that makes money by selling media inventory. “Much like other traditional media sales companies, when it puts forth reach numbers, it likes to project the most favourable numbers possible,” he said.

“Unlike traditional media, the new age Silicon Valley giants like to be both the player and the referee. So, they want to measure themselves and each one have their own way of doing it,” Kumar said. As a result, this makes things complex and can frequently be biased, at times misleading. He added:

It’s a real problem, since real monies are involved.

Nonetheless, Kumar said it is imperative for marketers to understand that Silicon Valley giants have “super aggressive sales targets” to maintain their stock multiples, and as such, it is in their interest to put their best face forward. “It is up to the businesses to use the right kind of experts to understand what the numbers really mean and matter to them, rather than get carried away,” he said. Kumar pointed out that industry tools such as Nielsen Ad ratings and comScore can help marketers with some of these ad metrics.

Shifting from digital to being channel agnostic

While many marketers mainly rely on the Facebook-Google duopoly to reach audiences, Darren Yuen, group managing director, Reprise Malaysia, told A+M that optimising digital spend does not mean marketers need to be solely reliant on publisher options.

In fact, it must be based on sound audience insights to reach the right audiences at the right time, with third-party safety and verification measures in place. He added that technology exists to help ensure marketers’ ad spend on media buying is credible, especially in the areas of content filters, placement errors and verification of content labels. It is also crucial to have in place platform and media agnostic tools and systems to ensure credibility in media buying. Yuen said:

This is where third-party ad servers continue to evolve and play a big part in the credibility of ad buys.

According to Yuen, now that more data is available to marketers, the shift in spending is moving towards a more channel and publisher agnostic approach that optimises audience planning, rather than reach or impressions planning.

“The shifts in the market place has gone beyond reach for quite some time now, and moving down the audience funnel has become so much more important in digital spend measures,” he explained.

Meanwhile, Carat Malaysia’s digital director Naveen Thomas said brands must focus on effectively communicating in the right channels, while exploring new spaces to deliver effective results. As audience’s media consumption behaviours and habits shift, the agency sees digital expenditure shifts to meet the audience.

Nonetheless, marketers today still need to have a “pragmatic view” on data derived from industry giants such as Facebook and Google to complement and add value for clients. He added that the network, including Carat, uses proprietary tools and partnerships that enables it to merge and stack both offline and online data sets. This provides marketers a clearer picture of how to effectively plan and shape their digital opportunities.

“Trust and transparency rule the verification narrative today. As more marketers focus on measuring ad fraud, viewability and brand safety through a host of verification partners, we move the needle on effectiveness and promote a result oriented digital culture,” Thomas added.

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