Three marketers who say they purchased video ads on Facebook have sued the social networking service for allegedly providing incorrect metrics about the length of time that users spent watching video ads.
The marketers allege in a potential class-action that Facebook "induced" advertisers to purchase video ads -- and to pay higher rates for them -- by overstating the time that people spent watching video ads.
The complaint stems from recent revelations that Facebook inflated the average time spent viewing ad clips by 60% to 80%.
Facebook said in September that its mistaken calculations didn't affect billing.
But the marketers contend that the incorrect metrics made video ads appear more valuable than was the case. "By misrepresenting the average time its millions of consumers spent watching posted advertising videos, Facebook induced advertisers, like Plaintiffs, to continue to purchase video advertisements based on the belief that the advertisements were more successful than they actually were," marketers Tom Letizia, Mark Fierro and Greg Agustin allege in a class-action complaint filed late last week in U.S. District Court for the Northern District of California.
The complaint alleges that Facebook violated various California laws, including laws regarding unfair and fraudulent business conduct.
"As a result of Facebook’s 'unfair' conduct, plaintiffs and members of the class expended money on advertising that they would not otherwise have spent, or overspent for advertising on the Website based upon Facebook’s representations that their video advertisements were being viewed at much longer durations than the time actually viewed," the marketers allege.
They are seeking monetary damages and attorney's fees.
Facebook hasn't yet responded to MediaPost's request for comment on the lawsuit.
So here's another conundrum...there's a huge discrepancy between what FB shows as results of its regular ad campaigns on mobile devices. Rakuten issued a report this week that interprets that to mean FB is under-valued by advertisers and 3rd party trackers - but what if it's the opposite interpretation, and FB is inflating its metrics across the board? Here's the Rakuten report which argues we should be giving FB more attribution value, and disbelieving our 3rd party trackers when it comes to mobile:
When I look at our own metrics from FB reports, they don't pass the sniff test for credible human behaviors. I've been buying digital media since 1996 and I am seeing patterns in the FB reports that simply don't make sense.
For example, we ran a test to see what would happen if we used identical creatives, on identical audience segments, but just changed the optimization schema (payment option). Specifically, one was set up as a CPM campaign, the other as CPC campaign. Naturally, the CPC campaign had a higher "site clicks" rate - which was our call to action - but the increase was completely impossible. The same creative went from performing at .01% CTR (normal display avg)in the CPM campaign to a 4% CTR in the CPC campaign (um...really? I know we're good but that's statistically out of norms by a mile).
Additionally, the engagement metrics on the CPC campaign were much lower than the CPM campaign by far...which, if you apply the logic that somehow the FB CPC algo targets its ad more to "clickers", doesn't make sense: if they can't keep from clicking things, how are they not clicking the other engagement metrics in the creative? On the flip side, the "reach" impressions of the CPM campaigns were 10x of the CPC campaigns. So how can both metrics be true?
All of this is to say, I am rather stumped as to how no one in the media or the IAB is doing an investigation across all FB advertisers - or at least start having a conversation about it. Back in the 2000s, Google was found to do all kinds of shenanigans to create revenue growth, and it was the industry professionals and organizations like SEMPO that held them accountable (especially with regards to the Google Ad Network which was full of publishers who were inflating impressions, clicks etc.) I would challenge all advertisers (and MediaPost) to start digging. There's more to this story, I guarantee you.
And now there's this: http://www.mediapost.com/publications/article/289214/facebook-admits-to-more-ad-measurement-problems.html?c=147635#reply