A class-action complaint was filed against Facebook, Inc. on August 15, 2018 by Danielle A. Singer and her company Project Therapy, LLC. The Complaint outlines claims that Facebook overstated its “Potential Reach” numbers which “can skew an advertiser’s decision making.”
They allege that Facebook’s Potential Reach numbers are dramatically inflated when compared to census numbers. For example, in September 2017, Facebook claimed a reach of 1.2 million 18 – 34 year-olds in Dallas, but the census for this population segment is 379,567, a 216% inflation.
While Facebook hasn’t filed an Answer, they do note on their website that potential reach is a “unique calculation by Facebook” and isn’t meant to match up with third-party calculations or census data. This is in-line with the statement they released in September 2017 in response to questions of overstated audience numbers, which Variety covered. Facebook further claimed that the demographic-segment totals represented in Ads Manager are not used to transact business (i.e. ads aren’t purchased based on the estimates).
Obviously, this last point is one that Project Therapy strongly contests.