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Facebook faces another lawsuit -- this time over video ad metrics

With the platform’s billion-sized audience, do advertisers suck it up or look for another place to spend their ad dollars?

Photo via Twitter
Is it better to ask permission or beg for forgiveness?

In Facebook’s case, the long tail of its history of begging off has grown a little longer. According to a complaint filed Tuesday by advertisers, the Wall Street Journal (WSJ) reported that Facebook was aware of problems in its measurement of video ads for more than a year before it finally got around to disclosing the issue.

The backstory of this chess game goes back to 2015 when a group of small advertisers sued Facebook claiming that the company’s business conduct was prejudiced because it published faulty metrics that were appreciably out of whack -- like as much as 900 percent out of whack.

On Tuesday, the plaintiffs -- who include Crowd Siren, a marketing agency in Las Vegas, and Jonathan Murdough, a Pennsylvania resident who purchased Facebook video ads -- filed an amendment in the lawsuit claiming that Facebook knew in early 2015 that its video-ad metrics had inherent issues but chose to sit on that knowledge for over a year.

Facebook and marketers butt heads

Hat-in-hand, Facebook eventually came out of hiding in 2016, saying that it had “recently discovered” the problem. The company told advertisers that its metrics were overestimated by only 60 to 80 percent and then followed up by addressing its video metrics changes in July 2018.

Despite the candor of its missteps, waiting that long didn’t help matters.

“In June 2016, a Facebook engineering manager finally followed up on advertiser complaints dating back to early 2015, writing that ‘[s]omehow there was no progress on the task for a year,’" claimed the lawsuit.

“But even once it was decided to take action on the metrics, Facebook did not promptly fix its calculation or disclose that the calculation was wrong. Instead, it continued reporting miscalculated viewership metrics for another several months, as it developed a ‘no PR’ strategy to avoid drawing attention to the error. The company decided to ‘obfuscate the fact that we screwed up the math’ by quietly retiring the erroneous metrics and replacing them with corrected metrics under a new name. For instance, Average Duration of Video Viewed would be replaced with Average Watch Time,” the plaintiffs said.

In response, a Facebook said that the allegations were patently false.

“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,” a company spokesperson said.

As companies are wont to do when defending the first volley in a lawsuit, Facebook declares the lawsuit is without merit and has moved to dismiss the fraud claim.

Let it go?

The question of credibility will no doubt grow as both advertisers and users continue to weigh the merits of Facebook in their personal and professional lives.

“Facebook wholly made up the metrics that convinced advertisers to spend on video, and entire media organizations restructured based on that lie, “ tweeted media watcher Joshua Rivera.

Abandoning Facebook for other social media platforms is a conundrum for advertisers, and -- given the platform’s reach -- “playing ball” with Facebook might be the only way through situations like this.

“(Brands are) using all 200+ targeting channels, comparing brand databases with Facebook’s, running contests and promotions, and experimenting with different units and page placements, all in an attempt to regain access to the fans they already earned and expand their reach among Facebook’s billion+ users,” writes Danny Flamberg, Managing Director for Digital & CRM Strategy at the Kaplan Thaler Group.

“There are many cases of successful lead generation and awareness campaigns, though the ROI varies widely.”

As Bruce Schneier, a fellow with the Berkman Klein Center for Internet & Society, quipped in a ConsumerAffairs article about Facebook privacy, “Personalized advertising is how these companies make money, and is why so much of the internet is free to users. We’re the product, not the customer.”

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