Facebook Hid Inflated Video Ad Metrics Error for Over a Year, Advertisers Allege

Lawsuit says erroneous metrics were overstated by as much as 900%

Plaintiffs claim Facebook engineers were aware of the miscalculation for more than a year but said nothing. Photo Illustration: Dianna McDougall; Sources: Getty Images
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Facebook intentionally obfuscated the problem of overstated average watch times on paid video ads for more than a year, a group of digital marketers charged in court documents unsealed on Tuesday.

In September 2016, The Wall Street Journal reported that Facebook had been miscalculating the average time users spent viewing paid video ads by 60 to 80 percent. At the time, Facebook said the problem had existed for about a month and that it had been fixed.

But a group of marketers, who in 2016 filed a class-action lawsuit against Facebook for the erroneous metrics, on Tuesday alleged that Facebook knew of the problem for much longer than a month and did nothing for more than a year. In the amended court filing, which Adweek reviewed, the plaintiffs cited internal Facebook communications they say shows that as far back as July 2015, Facebook engineers were aware of why the miscalculation was occurring.

The plaintiffs claimed that some paid video ad metrics were inflated by 150 to 900 percent, more than previously reported.

Facebook used a “no PR” strategy to avoid drawing attention to the problem and “obfuscate the fact that we screwed up the math,” the plaintiffs alleged, citing the internal communications. The advertisers said the new information prompted them to add an allegation of fraud to their initial complaint.

In a statement, a Facebook spokesperson denied the new allegations.

“This lawsuit is without merit, and we’ve filed a motion to dismiss these claims of fraud,” the spokesperson said. “Suggestions that we in any way tried to hide this issue from our partners are false. We told our customers about the error when we discovered it—and updated our help center to explain the issue.”

When asked about the communications cited in the lawsuit, the company said  the plaintiffs “mischaracterized” the documents, took them “out of context” and “cherry picked” the quotes.

The plaintiffs had gained access to 80,000 internal Facebook documents as a result of the ongoing litigation stemming from the 2016 complaint. The internal documents were the basis of the updated claim that included allegations of fraud. Facebook initially fought to prevent the release of the documents. The plaintiffs pushed for the information to be unsealed, and the publisher trade association Digital Content Next informed Facebook that it planned to file an amicus brief on behalf of the digital publishing industry to have the court filing unsealed, DCN CEO Jason Kint said.

The suit was bought by marketers who have run video advertisements on the platform. Included among them are the social media marketing agency LLE One, which conducts business under the names Crowd Siren and Social Media Models, and a Pennsylvania man who purchased advertising on the platform. They say they purchased video advertising services from Facebook based on inflated viewership metrics that led them to buy more advertising and pay a higher price than they would have had they been privy to the actual metrics.

They are seeking relief for others who paid for placements while the erroneous measurements were in place and are seeking punitive damages along with a requirement that Facebook allow third-party auditors to evaluate its advertising metrics.

The plaintiffs aren’t alone in wanting more third-party verification options. A number of industry leaders, including the media agency Omnicom and Unilever chief marketing officer Keith Weed, have called on Facebook to allow outside measurement.

Since the 2016 video ad metric scandal, Facebook has made changes to how it measures the performance of video advertisements on the platform and other advertising metrics. Earlier this year, the company was accredited by the Media Rating Council to provide some metrics to marketers, and it has introduced some measurement verification partners.

Kint, whose organization represents digital media publishers, said Wednesday that the new information gleaned from the court filings sheds light on how Facebook operates when its business partners come to the company with problems.

“There are significant trust issues around how a company and its leadership acts when they’ve made a mistake, but when the industry and the public don’t yet know about it, and I think Facebook fails on that, based on what I am reading,” Kint said. “And then there are also significant trust issues around how a company behaves once they’ve been called out on something. And I think they fail here, too.”

@kelseymsutton kelsey.sutton@adweek.com Kelsey Sutton is the streaming editor at Adweek, where she covers the business of streaming television.
Publish date: October 17, 2018 https://stage.adweek.com/digital/facebook-hid-inflated-video-ad-metrics-error-for-over-a-year-advertisers-allege/ © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT