Facebook is accused of luring advertisers with 900 percent inflation of video numbers and hiding it for a year

By Jennifer Smith For Dailymail.com
15:24, 17 Oct 2018, updated 17:37, 17 Oct 2018

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A group of small Facebook advertisers allege it defrauded them by knowingly exaggerating video watch times
In September 2016, Facebook confirmed a flaw in how it calculated viewing averages
The company only used videos which had been watched for three seconds or longer to produce averages
It meant millions of clips that had been watched for shorter times were discarded from the process and the average was higher
Facebook said the flaw meant figures were inflated by up to 80 percent
Now, advertisers say the number was closer to 900 percent
They also say Facebook engineers knew about the problem in July 2015 – more than a year before they were made aware of it
Engineers talked about a ‘no PR strategy’ that was being used to try to fix it
Their new allegations come from 80,000 pages of Facebook internal records
Facebook has been accused of inflating video views metrics by up to 900 percent – more than 10 times what it admitted to – and hiding the problem for a year before telling advertisers. CEO Mark Zuckerberg is pictured
Facebook has been accused of inflating video views metrics by up to 900 percent – more than 10 times what it admitted to – and hiding the problem for a year before telling advertisers. CEO Mark Zuckerberg is pictured
Facebook has been accused of drastically understating how much they inflated video metrics and hiding the problem for a year before telling advertisers about it.

According to fresh claims from a group of advertisers who are suing the social media giant, engineers knew about a discrepancy in the metrics measuring tool for a year before it was publicly disclosed in 2016.

The flaw was down to the fact that Facebook was only counting videos which had been viewed for three seconds or longer when it presented the companies with statistics about how long users were watching their ads.

Because it only factored in these clips and did not count all of the videos which people watched for three seconds or less, the average watch-time was drastically inflated to indicate that users were habitually watching videos for longer than they actually were.

The advertisers say it prompted them to spend more and more often than they would have had they known the real figures.

In 2016, when the flaw was discovered, Facebook said the mistake had inflated video views figures by up to 80 percent. Now, the advertisers say it the figures were inflated by up to 900 percent – more than 10 times more.

Their new claims are based off of exchanges between engineers which were buried in 80,000 pages of internal records that were recently released by the company.

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In those exchanges, one engineer acknowledges the problem in 2015 and discusses working on fixing it with a ‘no PR strategy,’ according to the lawsuit.

The advertisers say it amounts to fraud and that Facebook knowingly induced advertising with flawed data. The companies, which include Crowd Siren and other, small agencies, want others to join their case and turn it into a class action.

Facebook vehemently denies their allegations. It is seeking to dismiss the lawsuit.

I remember [another Facebook engineer] mentioned when computing the average, we only consider views greater than three seconds.’
Facebook engineer in July 2015, a year before advertisers were told about the flaw

In August 2016, the social media company admitted it had miscalculated metrics but said it only accounted for up to 80 percent and that no one had overpaid because of the mistake.

They first told advertisers then, a month later, announced the flaw publicly.

Facebook said at the time, and maintains, that they told advertisers about it as soon as they discovered it.

‘The metric should have reflected the total time spent watching a video divided by the total number of people who played the video. But it didn’t – it reflected the total time spent watching a video divided by only the number of “views” of a video (that is, when the video was watched for three or more seconds).

‘And so the miscalculation overstated this metric,’ VP of Business and Marketing Partnerships David Fischer said in an announcement at the time.

However the amended lawsuit, which was changed after the plaintiffs sifted through 80,000 pages of Facebook internal records, claims engineers knew about it at least a year before the announcement was made.

In September 2016, the company admitted it had miscalculated video watch number but said that it fixed it ‘as soon as we discovered the discrepancy’. Internal records however indicate, according to the lawsuit, that engineers knew about it in 2015 and did nothing to resolve it for a year
In September 2016, the company admitted it had miscalculated video watch number but said that it fixed it ‘as soon as we discovered the discrepancy’. Internal records however indicate, according to the lawsuit, that engineers knew about it in 2015 and did nothing to resolve it for a year
‘In an internal response to one such inquiry, a Facebook engineer discussed the numerator/denominator mismatch,’ the amended lawsuit, which was obtained by Business Insider, reads.

In July 2015, that engineer wrote: ‘I remember [another Facebook engineer] mentioned when computing the average, we only consider views greater than three seconds.’

In June 2016, an engineer said there had been ‘no progress on the task for a year’. They were ‘following up’, they said, to a complaint from advertisers about video watch times.

The engineer acknowledged that there was a ‘no PR strategy’ around the topic but said nothing had been done to fix it.

The lawsuit alleges ‘unethical, unscrupulous’ actions by Facebook which were ‘likely to deceive’.

‘Facebook’s misrepresentations artificially increased the price of Facebook video advertising, provided Facebook with an unfair competitive advantage over other online video advertising platforms, and interfered with Plaintiffs’ attempts to utilize Facebook’s video advertising analytics and to run effective video advertising campaigns,’ the lawsuit reads.

A Facebook spokeswoman said in a statement: ‘This lawsuit is without merit and we’ve filed a motion to dismiss these claims of fraud.

‘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.’

On Wednesday morning, Facebook’s stock remained unaffected.

It however marks the latest set of accusations against the embattled company which, for the last year, has been fighting off data hack scandals and gradually losing consumer faith.

Facebook aims to facts-check vide
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Group of marketers sues Facebook alleging ad fraud – Business Insider
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Source: Daily Mail