Facebook is currently waging a PR campaign purporting to show that Apple is seriously injuring American small businesses through its iOS privacy features. But at the same time, according to allegations in recently unsealed court documents, Facebook has been selling them ad targeting that is unreliable to the point of being fraudulent.
The documents feature internal Facebook communications in which managers appear to admit to major flaws in ad targeting capabilities, including that ads reached the intended audience less than half of the time and that data behind a targeting criterion was “all crap.” Facebook says the material is presented out of context.
“More than half the time we’re showing ads to someone other than the advertisers’ intended audience.”
The documents emerged from a suit currently seeking class-action certification in federal court. The suit was filed by the owner of Investor Village, a small business that operates a message board on financial topics. Investor Village said in court filings that it decided to buy narrowly targeted Facebook ads because it hoped to reach “highly compensated and educated investors” but “had limited resources to spend on advertising.” But nearly 40 percent of the people who saw Investor Village’s ad either lacked a college degree, did not make $250,000 per year, or both, the company claims. In fact, not a single Facebook user it surveyed met all the targeting criteria it had set for Facebook ads, it says.
The complaint features Facebook documents indicating that the company knew its advertising capabilities were overhyped and underperformed.
A “February 2016 internal memorandum” sent from an unnamed Facebook manager to Andrew Bosworth, a Zuckerberg confidant and powerful company executive who oversaw ad efforts at the time, reads, “[I]nterest precision in the US is only 41%—that means that more than half the time we’re showing ads to someone other than the advertisers’ intended audience. And it is even worse internationally. … We don’t feel we’re meeting advertisers’ interest accuracy expectations today.”
The lawsuit goes on to quote unnamed “employees on Facebook’s ad team” discussing their targeting capabilities circa June 2016:
One engineer celebrated that detailed targeting accounted for “18% of total ads revenue,” and $14.8 million on June 17th alone. Using a smiley emoticon, an engineering manager responded, “Love this chart! Although if the most popular option is to combine interest and behavior, and we know for a fact our behavior is almost all crap, does this mean we are misleading advertiser [sic] a bit? :)” That manager proceeded to suggest further examination of top targeting criteria to “see if we are giving advertiser [sic] false hope.”
“Interest” and “behavior” are two key facets of the data dossiers Facebook compiles on us for advertisers; according to the company, the former includes things you like, “from organic food to action movies,” while the latter consists of “behaviors such as prior purchases and device usage.”
The complaint also cites unspecified internal communications in which “[p]rivately, Facebook managers described important targeting data as ‘crap’ and admitted accuracy was ‘abysmal.’”
Facebook has said in its court filings that these quotes are presented out of context. The company attempted to suppress the internal documents, obtained by the plaintiff through the legal discovery process, on the grounds that they were “confidential” and could be harmful if competitors were to read them — an argument rejected by the court, which in November ordered the filings unsealed with minor redactions. The social network argued further, in its rejected motion to dismiss the suit, that it’s never guaranteed complete accuracy in its targeting, and that any claims of sophisticated targeting the plaintiff cited in its decision to buy Facebook ads were “generalized, promotional statements about Facebook’s advertising on which a reasonable consumer could not rely as guaranteeing a specific accuracy rate.”
“Facebook’s argument that its ad-targeting regime is good for small businesses is not only self interested — it is plain wrong.”
The lawsuit comes at an awkward time for Facebook, which has recently taken out full-page ads in several national newspapers claiming new iOS privacy safeguards will strangle American small businesses, which are already struggling with the economic cataclysm of the Covid-19 pandemic. Facebook calls this anti-Apple effort its “Speak Up for Small” campaign. The Investor Village lawsuit suggests that, far from being a pandemic panacea, Facebook’s ballyhooed ad targeting has actually wasted the time and money of small advertisers it now says it’s championing. “Facebook is no friend to small business,” said Steven Molo, an attorney representing the plaintiff. “As detailed in the allegations of our class action suit on behalf of advertisers, Facebook substantially misrepresented its ability to deliver ads accurately, to the dismay of its own employees.”
Though Facebook would like you to think it’s not, its new spat with Apple is dead simple. Historically, companies like Facebook have been able to monitor the way you use your iPhone (or iPad) in order to attempt to learn the details of your life on a vast scale in order to — as the pitch went to advertisers, at least — show you specific ads that reflect your private hopes, desires, friendships, movements, and so on. But starting in early 2021, Apple says this persistent surveillance will no longer be turned on by default; rather, iPhone owners would have to explicitly opt-in to be stalked by their apps, cutting off this firehose of deeply personal data. This is a major shift in an industry where surveillance is a given, rather than an option.
According to Dipayan Ghosh — a former Facebook executive and current co-director of the Digital Platforms and Democracy Project at Harvard Kennedy School’s Shorenstein Center on Media, Politics, and Public Policy — both Facebook’s anti-privacy PR blitz and this new lawsuit ironically lead to a similar conclusion: Facebook isn’t anyone’s friend but Facebook’s. “Facebook’s argument that its ad-targeting regime is good for small businesses is not only self interested — it is plain wrong,” Ghosh told The Intercept in an email. “Further, the recent [Investor Village] complaint indicates clearly that, if anything, Facebook advertising is not as effective for its advertising clients as it could be. The lack of transparency coupled with the perceived low bang-for-the-buck of advertising on Facebook has troubled marketers for many years — and it appears as though those perceptions may well be true.”
Facebook could not be immediately reached for comment.