Advertisers allege Facebook hid the fact that no one watches video ads

Irving Hamilton
October 18, 2018

Facebook did not wish to draw scrutiny to its viewership figures because it knows that the majority of video ads on its platform are viewed for very short periods of time-users scroll right past.

Facebook admitted in 2016 that it had only counted videos as "viewed" if they had been watched for three or more seconds.

Facebook also said at the time that the error didn't affect billings.

They allege Facebook's misrepresentations led them to believe that Facebook's video ads were more valuable than they actually were, resulting in inflated prices.

And when it did disclose the error to advertisers - who pay a premium based on expected viewership - the company claimed it overestimated the time users spent watching clips by 60 to 80 percent. "The persistence of Facebook's false metrics was possible only because Facebook did not take verification of its metrics seriously, severely understaffed the engineering team in charge of fixing errors, did not fully investigate or correct errors that were reported to it, and refused to allow third-party verification of its metrics".

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.

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Two months ago, the marketers amended their complaint to add allegations of fraud.

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.

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. "Suggestions that we in any way tried to hide this issue from our partners are false", a Facebook spokesperson said in an emailed statement. The group filed a lawsuit in California's federal courts in 2016 and added a complaint Tuesday claiming that internal records suggest "Facebook's action rises to the level of fraud".

In the filing, brought before the U.S. district court in Oakland the claimants write: "If Facebook had immediately corrected its miscalculation in a straightforward manner, advertisers would have seen a sudden and precipitous drop in their viewership metrics".

However, online marketing agency Crowd Siren's Tuesday complaint claims that Facebook knew about the inflated metrics as early as 2015, according to Bloomberg.

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