Metrics question
Facebook Marketplace sales are up and Local Ads revenue is down. Why?
- Meta
- Metrics
- Hard
Practice this question out loud. An AI interviewer asks it, follows up like a real interviewer would, and scores your answer. Type or speak.
Start a mock interview on this question · Mock interview from a job description
What this question tests
Diagnosing a metric divergence between two related products, checking for cannibalization versus independent causes.
How to approach it
- Confirm both trends are accurately measured over the same period, ruling out a reporting or attribution error.
- Hypothesize cannibalization: local businesses may be shifting spend or listings from Local Ads to free Marketplace listings.
- Segment Local Ads decline by advertiser category and region to see if it concentrates where Marketplace grew most.
- Check for external factors, like a broader ad market downturn unrelated to Marketplace.
- Decide if this trade off is net positive for the company and propose a next step, like bundling Local Ads promotion within Marketplace listings.
What a strong answer includes
- Leads with the cannibalization hypothesis, since Marketplace growth and Local Ads decline moving together is a strong signal of substitution.
- Segments the Local Ads drop by category to test the hypothesis rather than assuming it.
- Weighs the net business impact, noting Marketplace may generate less revenue per listing than a paid ad, which matters for the recommendation.
Common mistakes
- Treating the two trends as unrelated instead of testing for cannibalization first.
- Failing to consider the net revenue impact of the shift before recommending action.
Likely follow-up questions
- How would you validate the cannibalization hypothesis with data?
- What product change would you propose if cannibalization is confirmed?
More metrics questions
- How would you measure the success of Facebook Likes?Meta · Metrics · Medium
- How would you measure improvements made to Facebook messenger?Meta · Metrics · Easy
- Imagine you are the PM in charge of Reactions on Facebook - the new way to interact with posts by using “love”, “haha”, “wow”, “sad”, and “angry” reactions. What would success look like in terms of number of non-like reactions per post at launch and how do you come up with this? Would this number differ by reaction? Why or why not?Meta · Metrics · Hard
- You launched a new signup flow to encourage new users to add more profile information. A/B test results indicate that the % of people that added more information increased by 8%. However, 7 day retention decreased by 2%. What do you do?Google · Metrics · Hard
- Define the metrics for YouTube search.Google · Metrics · Medium
- You are the PM of Instagram app. The MAU has been constant but DAU has declined. What will you do?Meta · Metrics · Medium
More questions from Meta
Learn the skill behind it
Chapters of the AI PM course that teach what this question tests.
- Chapter 9: Prove it paid off: outcomes, economics, and pricing
- Chapter 2: Data fluency: SQL, logs, and reading the truth yourself
- Chapter 14: Get the job: the AI PM interview loop