Facebook hid a flaw in its video-advertising metrics that overestimated viewer engagement for more than a year in an effort to entice and keep advertisers on its platform, according to a lawsuit filed by a group of advertisers.
The group of ad buyers has filed a fraud complaint alleging the social media giant hid the “irregularities” in its video metrics for over a year, misleading advertisers into believing that people were spending considerably more time watching their ads than they actually were.
The complaint builds on the lawsuit they filed in late 2016 in California federal court alleging Facebook engaged in unfair business conduct when it released false metrics that overestimated the amount of time spent watching video ads, in some cases inflating viewing time by 900 percent.
The group of advertisers, including Las Vegas-based marketing agency Crowd Siren and Pennsylvania resident Jonathan Murdough, took the social media company to court after a September 2016 report revealed Facebook severely overestimated the time users spent watching video ads. The company revealed the error in August, but the admission only inflamed suspicion about the integrity of the platform’s internal ad data.
One brand executive has called Facebook and other tech firms’ policy of shielding ad data from buyers akin to “grading their own homework.” Others, including trade group the Association of National Advertisers, have called for independent audits of the platforms’ ad data and metrics. Facebook has caved somewhat to industry pressure, allowing the Media Rating Council and other measurement companies to conduct audits.
Facebook moved to dismiss the fraud claim, stating the lawsuit is baseless and that it informed customers of the problem with its metrics when it was discovered. They also claimed the error didn’t affect billing, though with viewership metrics inflated 150 to 900 percent, it’s easy to see how advertisers might have seen the inflated numbers as incentive to buy more ads. For its part, Facebook only admitted it had overestimated viewing time by 60 to 80 percent.
Facebook failed to factor in video views lasting under three seconds when calculating its “average duration of video viewed” metric for two years, significantly inflating watch times since most users tune out during the first few seconds of an ad. They finally replaced that model with an “average watch time” metric that included shorter view times in 2016.
Citing 80,000 pages of internal Facebook documents obtained during court proceedings, the plaintiffs claim the company had already received several inquiries about suspect video metrics by July 2015 and soon determined the cause, but did not follow up on those inquiries for a full year. Worse, they claim, Facebook deliberately took a “no PR” stance on the matter to avoid drawing attention to it.
Video ads are a huge market, estimated to grow to $27.8 billion dollars this year. Facebook makes up about 25 percent of US video ad spending, according to eMarketer.
Last month, Kansas City psychotherapist Danielle Singer filed a class action lawsuit against Facebook, alleging the company had falsely inflated the potential reach of its advertisements. Among other sources, the suit drew on a report by industry group Video Advertising Bureau showing that Facebook’s audience reach estimates in every US state were higher than the states’ actual populations according to the US census.
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