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Meta Accused of Inflating Ecommerce Ad Performance Metrics

2025-08-21

A whistleblower complaint alleges that Meta artificially inflated the return on ad spend (ROAS) for its Shops ads product by including shipping fees as revenue, subsidizing bids, and applying undisclosed discounts. The former employee, Samujjal Purkayastha, claims this was done to counteract the impact of Apple's 2021 privacy changes and boost adoption of the fledgling ecommerce ad product. Internal reviews allegedly revealed a 17-19% ROAS inflation due to the inclusion of shipping fees and taxes, a practice not followed by Meta's other ad products or competitors like Google. Purkayastha, who was subsequently terminated, brought these concerns to senior leadership. Meta denies the allegations and is actively defending the lawsuit.

Reddit's AI Licensing Revenue and Ad Business Boom

2025-02-14

Reddit COO Jen Wong revealed that content licensing agreements now account for roughly 10% of Reddit's total revenue, a significant portion for a business of its size. Reddit has partnered with Google and OpenAI for content licensing, focusing on collaborations with AI developers who adhere to their user privacy and brand representation terms. While AI licensing is a valuable revenue stream, advertising remains the core driver. Reddit's ad revenue surged 60% year-over-year in Q4 2024, fueled by new offerings like AMA Ads and Pro Trends, and investments in machine learning and AI to enhance ad targeting and user engagement. Reddit's daily active users are also growing, but the company hasn't yet achieved annual profitability, despite posting a profit in Q4.