Meta Platforms’ chief revenue officer and other senior leaders have used their authority to boost the saturation of advertisements on Facebook and Instagram feeds to meet Wall Street performance projections, according to trial testimony today in a US Federal Trade Commission case over alleged social media monopolization.
Meta Platforms’ chief revenue officer and other senior leaders have used their authority to boost the saturation of advertisements on Facebook and Instagram feeds to meet Wall Street performance projections, according to trial testimony today in a US Federal Trade Commission case over alleged social media monopolization.Meta Vice President for Monetization John Hegeman's testimony about “ad load” and advertising targeting algorithms today complicated claims from the company’s top research VP earlier in the day about the company’s ability to control advertising flows with precision toward particular users.
Near the end of trial testimony from Meta research head Curtiss Cobb, who oversees a team of social scientists that analyze daily measurements of “sentiment metrics” and behavior across the billions of daily active users on Facebook and Instagram, he was asked about an additional leadership role involving monetization and user behavior.
Cobb said he couldn’t recall ever being asked, in either his current role or prior roles, to look into the possibility of showing more ads to users who exhibit a preference for content from their family and friends.
Because the FTC’s monopolization suit against Meta alleges anticompetitive conduct in a “personal social networking services” market where the product being sold to consumers has a sticker price of $0, a key hurdle in the case is whether the agency can show that the tech giant exercises market power through consumer harms like increased “ad loads” that users can’t avoid (see here).
During proceedings in the District of Columbia today, Hegeman testified that he and others have previously made decisions to increase the average ad load on Facebook and Instagram users in order to meet Meta’s projected revenue targets — key indicators looked at by Wall Street when assessing the performance of their investments.
During the liability phase of a successful US Department of Justice antitrust trial accusing Google of monopolizing the search and search advertising markets, evidence emerged that the tech giant implemented pricing adjustments to its online advertising auction system in response to concerns about Wall Street analyst expectations and sales team morale (see here).
Hegeman today also acknowledged the existence of a “dynamic ad load system” that can adjust ad load levels for particular users. When asked whether a version of this system was implemented on Facebook in 2016 and on Instagram in 2019, Hegeman said he wasn’t sure but that that timeline “sounds possible.”
During earlier trial testimony from Meta's former chief operating officer and a key champion of the company’s advertising business, Sheryl Sandberg, she challenged the FTC’s assertion that Meta can “price discriminate” by showing more ads to people who want to see more friends and family content.
Sandberg also acknowledged the existence of Meta's dynamic ad load tool, but strongly objected to the idea that Facebook and Instagram can target ads to users with a proclivity toward sharing content with friends and family. “That’s not true and doesn’t make any sense,” Sandberg testified.
Meta also today objected to the introduction of an undisclosed exhibit that Hegeman appeared to be unfamiliar with.
Boasberg overruled the objection to questioning Hegeman about the document, however, it was not shown to the public. Hegeman described it as “a post that went to a huge number of people” in the company.
FTC attorney Stephen Pearson asked Hegeman to confirm whether the post outlined the company’s criteria for a “needy user pool.”
In response, the former VP of monetization who has been with the company since 2007 said he did not recall “being involved in setting those criteria.”
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