LinkedIn in the US is facing a class action from its advertisers related to the revelation in November last year that it misreported advertising metrics for ad views and video plays for at least two years.
Among the accusations the company faces is that for years, the prices it charged advertisers were too high as they were based on inflated metrics tied to clicks.
Wohl and Fruchter, lawyers acting for Synergy RX PBM LLC, a US health company — along with what it says are “other similarly-situated advertisers” — issued a note last week announcing the action against LinkedIn Corporation in the United States District Court for the Northern District of California.
“Broadly, the complaint alleges that LinkedIn deceived advertisers by disseminating inaccurate and inflated impressions, video views, clicks and other metrics to Plaintiff and other Class members, which caused advertisers to believe their advertisements were performing better than they actually were, and to therefore pay more for ads, and buy more ads, than they otherwise would have, absent the deception. The complaint further alleges that LinkedIn concealed from advertisers that its auditing processes and systems were deficient.
“The complaint seeks monetary compensation for losses, an injunction, and other relief.”
In a written response a Linkedin spokesperson referred Which-50 to the company’s initial comment from November last year, “We’ve seen the filing. Our post is the best source for comment – we are currently working with all customers who were impacted to provide full credit to their accounts.”
At the time Linkedin wrote, “We are committed to the transparency and integrity of our ads products. This commitment guides us as we improve our offerings and systems to help ensure we maintain a trusted platform.
“This also means that when something goes wrong, we address it. In August, our engineering team discovered and then subsequently fixed two measurement issues in our ads products that may have overreported some Sponsored Content campaign metrics for impression and video views. Together these issues potentially impacted more than 418,000 customers over a two-plus year period. More than 90% of customers saw an impact of less than US $25, and we are currently working with all customers who were impacted to provide full credit to their accounts. ”
The accompanying copy of the complaint says that on November 12, 2020, LinkedIn revealed it had discovered measurement errors in August 2020 and that the impact of these errors was inflated metrics tied to impressions and video views for at least two years.
Wohl and Fruchter argue that this potentially impacted over 418,000 advertisers during that time frame.
“For example, LinkedIn recorded video views for video ads that continued to play off-screen, which would have inflated video view rates (as a LinkedIn spokesperson confirmed). In other instances, LinkedIn recorded impressions when members simply rotated their phones.”
The fact that these metrics appear to have been wrong for so long has led to an accusation that LinkedIn’s internal auditing processes and systems have been deficient for years.
“LinkedIn knew this and admitted as much in its November 2020 announcement when it disclosed that, as a result of discovering the inflated metrics, it would begin ‘investing in improvements to our processes and systems,’ and retain the Media Rating Council (MRC) — a media industry watchdog — to ‘audit our metrics.’ LinkedIn could and should have taken these steps years ago. Had it done so, the inflated metrics only first discovered in August 2020 would have been promptly detected and fixed before causing harm to advertisers.”
But, in the words of the plaintiffs, “it did not do so because inflated metrics boosted LinkedIn’s revenue.”
The other issue at the heart of the action concerns transparency of the corrective action which LinkedIn has undertaken.
According to the complaint, “In its announcement, LinkedIn advised that it had issued ‘credits’ to advertisers ‘potentially impacted’ by the inflated metrics. But it has never disclosed how it calculated these ‘credits,’ nor how it determined which advertisers were ‘impacted.’ Instead, LinkedIn has taken the position that it is free to unilaterally decide without any accountability which advertisers to compensate, and what sums to pay them (apparently based solely on PR considerations).”
Wohl and Fruchter argue that LinkedIn must fully compensate all impacted advertisers for all the harm caused by those inflated metrics.
They also allege the problem may be deeper than LinkedIn has admitted.
“Moreover, it appears that LinkedIn’s measurement errors extend well beyond inflated metrics tied to impressions and video views. According to credible experts and other public sources, LinkedIn’s platform is plagued by fraudulent activity, including large volumes of invalid clicks.”
Finally, they argue, “the fact that LinkedIn failed to acknowledge the invalid clicks and other fraudulent activity on its platform discovered by third parties means that Plaintiff and other advertisers continue to face an actual threat of future harm of being further exposed to inflated metrics on LinkedIn that can only be addressed by injunctive relief.”