Class Action Suit Filed Against LinkedIn for Overreporting Ad Metrics

Law360 reported that on Nov. 23 lead plaintiffs, Drew Krisco and Livly, Inc., filed a putative class action lawsuit against LinkedIn Corporation for "overcharging advertisers and misrepresenting the reliability of the data produced by its advertising platform." Thus, they allege that the employment-oriented online service company engaged in fraudulent and unfair business acts and practices, violating California’s Unfair Competition Law (UCL), California Business and Professions Code. Plaintiffs also seek "compensation for the amount they were overcharged, as well as seek an accounting of their ad accounts, along with those of the Class, to ensure that the payments they have made are consistent with the services they received."

Like many of the social media giants, LinkedIn charges a high fee for its ads with its networking reach of 706 million total users, with more than 260 million monthly active users. While advertisers have tools to track their own information, they rely on LinkedIn for other data and reporting.

Drew Krisco, a LinkedIn customer, and Livly, Inc., a corporate ad buyer on LinkedIn, represent a proposed class who relied upon LinkedIn's assurance of accurate advertising metrics and reporting. However, according to the complaint, on Nov. 12, LinkedIn confirmed on its blog that “[i]n August, [its] engineering team discovered and then subsequently fixed two measurement issues in [its] ads products that may have overreported some Sponsored Content campaign metrics for impression and video views.” The company also stated that "these 'issues' impacted hundreds of thousands of LinkedIn advertisers, undetected, over the span of at least two years." Thus, advertisers "paid for an unknown number of ineffective ads, losing out on the opportunity to serve effective ads that would have fulfilled the purposes of the advertisements. Had Plaintiffs and members of the Class known of the lack of reliability in choosing to place ads with LinkedIn, they would have taken their ad dollars to other competitive platforms."

The lawsuit cites additional reporting by the Wall Street Journal, which found that:

"With video ads, LinkedIn discovered that some organic videos and video ads would play while they were off-screen on Apple Inc.’s iOS devices. If a LinkedIn user scrolled past a video ad while the video was buffering, for example, the ad would autoplay even when out of view, but still be tracked and logged as a video view or completion. That may have resulted in overstated measures including video views and view-through rates, as well as overcharging advertisers paying by the view, according to a LinkedIn spokesman.

"The company also said it may have been overreporting impressions on sponsored-content campaigns in the LinkedIn feed—for example, in cases when users would rotate their phones or quickly move to other parts of the app, the spokesman said." 

The exaggerated measures, including video views and view-through rates, potentially caused overcharging advertisers, especially those paying per view. And, while the company discovered the issues in August 2020, it waited until December 2020 before it notified its more than 418,000 advertising customers. The complaint stated that "the impact of this failure to monitor and control its own advertising platform, the total extent of the damage to their customers is not yet known. Nor is there conclusive proof that these problems have been fully rectified and that other unknown 'measurement issues' may not lurk in its vast system." 

According to the WSJ "the company said more than 90% of the advertisers affected overpaid by less than $25, adding that it would provide them with credits for future ad campaigns." It also reported that LinkedIn "began talks in June with the Media Rating Council, the industry’s measurement watchdog, on an audit of its metrics. 'We are working with them to proceed with an audit of our metrics,' a LinkedIn spokesman said.'" 

LinkedIn is one of many tech companies facing scrutiny over its advertising metrics. In 2016, advertisers uncovered Facebook's practice of counting views on videos that were at least three seconds long, ignoring those with a shorter duration which underestimated and inaccurately increased the average length of video views. Facebook eventually reached a settlement.