facebook's fraud lawsuit for inflating its claimed reach for advertisers just posted 95 files (3,646 pages!) - including a lot of the evidence dcn pushed to unseal. includes internal email threads behind prior claims. looks damning. will link to prior threads in a bit. /1
In the thousands of pages, we learn Publicis in France was especially concerned suggesting clients significantly reduce spend leading to their largest client, P&G, supposedly ceasing all spend. They estimated differences of 40-50% in claimed reach vs census in certain targets. /2
We also see Alex Schultz (now CMO) breaking down the source of inflated reach which follow-up docs show he accurately assessed as mostly due to #2 - lying about age and #3 - fake and duplicate accounts. Both listed as "millions" of the inflation... /3
a reminder, this issue surfaced from a press report, caused a flurry of emails by COO, CFO, CMO, etc (now unsealed) where decision was made not to inform investors. That's why a top Senator wrote letter last week and it's part of a SEC complaint, too. Will link in a minute. /4
Back to the docs, we learned there was special sensitivity around "SUMA" (single user multiple accounts) which Schultz indicates wasn't part of the press cycles and that was considered important. Later internal analysis suggested SUMA was 40% of the inflated #s. /5
We also learn "Ineligible Accounts" was considered a massive contributor to inflated reach. How much is still redacted so we're left with an engineer's note of 15-50%. Reminder, Facebook dismisses all of this as "potential reach" that doesn't matter as they don't bill on it. /6
But on that note, smoking gun, we have an internal document that very clearly states why Facebook's reach estimation matters. Even in the case of direct response advertisers buying on clicks, they say it matters. For brand advertisers, it's arguably the most important metrics. /7
there are hundreds of pages of internal debates by emails and slides and chat threads whether Facebook should stop claiming potential reach of "people" and move back to calling them "accounts" in order to avoid what has been said to be fraud (hence this lawsuit). /8
there is also considerable expert analysis of Facebook's inflated reach. One document is nearly 1,000 pages and this chart caught my attention. I imagine it will catch yours, too. Quarter 18 is when Cambridge Analytica broke wide open and Zuckerberg was first called to DC. /9
As someone who has recently experienced Facebook deceptively working to keep me from deleting my account and instead keeping it "inactive," the numbers of inactives being counted towards an inflated reach number is all sorts of suspect. Here is the table for the data. /10
the expert's 923 pages take a variety of data sources to model facebook's inflated reach by country and demographic building to the larger numbers. it's remarkable the SEC and/or independent auditors don't do this to all their data considering prior incidents with FB. /11
We also see again how Carolyn Everson played role to have a council of advertisers "ready on our behalf' with press. Everson is same super senior executive who recently left after other unsealed emails showed her waving a flag of concern over this issue. /12
on a side note, I would also love to see redactions like this considering Facebook claims it doesn't have underage users on FB and Instagram (because "they're not allowed") when this clearly shows they stick to what the user tells them "for a ton of reason"..ahem, legal. /13
press should dig into these new files - happy to help act as a guide. it's critical facebook have external accountability probing the integrity of its #s. here is a thread of prior information summarizing them. /14
and again, here is a direct link to prior unsealed emails including a senior executive matching point that there is no question inflated reach estimations impacted budgets including for small and medium-sized marketers. /15
Here is @SenWarren's letter to the SEC on this concern from just two weeks ago. I frankly don't why there haven't been hearings launched over it. I've long called for a longitudinal audit of Facebook's user accounts. warren.senate.gov/imo/media/doc/… /16
woah. a deeply concerning internal Google doc just unsealed in US DOJ vs Google (adtech antitrust trial seven weeks from now).
Smells like bid rigging.
Translation (by me):
Red = bad for Google
Green = good for G
'Levels playing field' = helps G
'fairer competition' = helps G /1
at the very least, demonstrates the conflict of interest with having significant market power on both sides. here is a Google doc roadmapping these changes to their auctions from the buy-side and the sell-side ahead of analyzing the impact and mitigating outcry. /2
for example, here is what looks to be Google analyzing what would happen to their biz when they removed "Last Look" which gave Google a significant advantage after an ad auction had been run. Don't miss the Green at bottom. /3
more news yesterday in flurry of activity in lawsuit vs Facebook for (over)paying FTC $5B to protect Zuckerberg. Big names involved. Board records inspection shows who's who in 'approval' - everyone now gone except Zuckerberg, Andresseen and Alford. Gets interesting quickly... /1
Yes, Andreessen joined Thiel in politics with full-throated endorsement of Trump with close allies. Alford was CFO of Chan Zuckerberg right before approval. WSJ reported Chenault and Zients (important: now Biden's chief of staff) stepped down over disagreements with Mark Z. /2
So what's happening. Well, first in April 2024 all of these prior and current board members were served in the lawsuit. Again, this is based on a prior records inspection of non-privileged board documents and the Court at that point deciding to allow the case to move forward. /3
Friday night KA-boom. In adtech antitrust lawsuit against Google, court has ordered the state AGs may depose Google co-founder Sergey Brin and CEO Sundar Pichai. Huge. /1
So the two cited reasons Pichai will be deposed (although not all of them) are incredibly sensitive. 1), “Jedi Blue,” the alleged collusion with Facebook that everyone wrongly wrote off back earlier in this lawsuit. Google CEO Pichai met directly with Facebook CEO Zuckerberg. /2
A reminder the Google and Facebook deal (aka the “NBA” or “Jedi Blue”) is also in a private antitrust suit against Facebook. The deal was signed by the lieutenants of the CEOs (Sheryl Sandberg for Facebook). /3
US v Google flooded docket (103 filings!) over weekend as Court said Friday...hey now, let's skip summary judgment, this baby is going to trial. Much is companies trying to keep their secrets sealed but we get a sense for the witnesses. And a small taste of evidence to come. /1
On the companies filing to keep their secrets sealed which they mostly provided under subpoena, it's a mix of adtech, agencies, platforms, you name it. /2
We also learn some glossary items which likely come up:
'RASTA' - Google's tool to evaluate new 'launches' (aka changes) in ad serving system, runs on live traffic
'Ariane' - identifies and summarized launches
'Launch' - creative name (lol), it replaced Ariane in 2020/2021 /3
SCOTUS just posted order list. It granted cert to Facebook on its Cambridge Analytica matter. Only first question but that’s a huge one. Basically should Facebook have disclosed to shareholders what it started to cover up in 2015 rather than presenting risk as hypothetical? /1
Here is the actual first question as written. One immediate item, it’s outrageous if Justice Kavanaugh didn’t/doesn’t recuse seeing his reported best friend, Joel Kaplan, was directly involved in the matter and its cover up. He threw his SCOTUS confirmation party IIRC. /2
Here is a link into background. I strongly urge press not to overlook this or assume you know fact history. Over the years much has played out in coverup and much of the reporting has been bent towards Facebook’s spin. I am more than happy to point you to the court records. /3
“X has lost dozens of major advertisers under Musk’s ownership, with 74 out of the top 100 U.S. advertisers from that month no longer spending on the platform as of May.” 1/4
Smart NBC report focusing on amplification, velocity and reach, “X isn’t living up to its own policies when it allows violent extremists to use the platform’s amplification features.” 2/4
“It’s not clear to what extent people at X were aware that the company was monetizing the extremist hashtags prior to NBC News’ reporting.” 3/4