Facebook Inflated Video Metrics By Up To 900%, Marketers Claim

Marketers who are suing Facebook over allegations of inflated video metrics say the company's errors were worse than it previously acknowledged.

“Facebook’s records also show that the impact of its miscalculation was much more severe than reported,” marketers allege in court papers filed in August, but only unsealed on Tuesday. “The average viewership metrics were not inflated by only 60%-80%; they were inflated by some 150 to 900%.”

The legal battle, which dates to 2016, stems from revelations that Facebook misreported two metrics related to its video ads. Two years ago, when the news first emerged, it was reported that Facebook inflated the average time spent viewing ad clips by 60% to 80%. The company has said its mistaken calculations did not affect billing.

Several marketers, including LLE One (which does business as Crowd Siren and Social Media Models), subsequently sued Facebook over the incorrect figures. 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.

Two months ago, the marketers amended their complaint to add allegations of fraud. At the time, large swaths of the complaint were blacked out, including the information forming the basis of the fraud allegations.

But the unsealed version of the amended complaint, which wasn't made publicly available until Tuesday, includes more details about the fraud claims.

That complaint alleges Facebook engineers knew about a problem with the metrics in July of 2015, but didn't publicly acknowledge it until more than one year later. The complaint also alleges that Facebook's errors were more significant than reported in 2016.

“Facebook engineers knew for over a year, and multiple advertisers had reported aberrant results caused by the miscalculation (such as 100% average watch times for their video ads). Yet Facebook did nothing to stop its dissemination of false metrics,” the marketers allege in the amended complaint, filed with U.S. District Court Judge Jeffrey White in Oakland.

They add that the average “duration of video viewed” and “percentage of video viewed” metrics were “typically inflated by between 150% and 900%.”

“Facebook either knew that the average viewership metrics it was reporting ... was false or reported those metrics recklessly and without regard for their truth,” the complaint alleges. “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.”

Facebook says the lawsuit is “without merit” and that it has asked White to dismiss the fraud claims. “Suggestions that we in any way tried to hide this issue from our partners are false,” the company says. “We told our customers about the error when we discovered it -- and updated our help center to explain the issue.”

2 comments about "Facebook Inflated Video Metrics By Up To 900%, Marketers Claim".
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  1. Darrin Stephens from McMann & Tate, October 17, 2018 at 2:03 p.m.

    If true, advertisers should hold their agencies' feet to the fire and ask how Facebook was able to dupe them. I suspect the relationship between Facebook and agencies has gotten waaaay too familiar, and we are too afraid or too dumb to question their metrics.

  2. Ed Papazian from Media Dynamics Inc, October 17, 2018 at 5:34 p.m.

    Reminds me of the Bernie Madoff ponzi scheme. So many "duped" investors accepted the inflated earnings without question---even though anyone with a bit of common sense could have---or should have---seen that such inflated profits were mathematically impossible. The basic ploy in most scams is the basic fact that the "victims" dupe themselves---with greed being the primary culprit.

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