Facebook denies new claim it kept lid on video metrics problem

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Mark Zuckerberg
Mark Zuckerberg Credit: Marlene Awaad/Bloomberg

Facebook is once again under pressure for providing faulty metrics to advertisers. The social network, which two years ago admitted to errors in how it calculated video views, faces new charges that it did not respond quickly enough to the problem.

On Tuesday, in a new filing to an ongoing lawsuit in California federal court, Facebook was accused of sitting on information for more than a year about inflated video view metrics it was sharing with brands and advertisers.

Facebook disputes the allegations, saying the lawsuit is "without merit." "We've filed a motion to dismiss these claims of fraud," a Facebook spokeswoman said in an email statement on Tuesday. "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."

Facebook gives brands data about how well their unpaid posts perform, and for two years its math was off for how it calculated the average amount of time viewers spent watching videos. In 2016, addressing the problem with marketers, Facebook said that the average time was inflated by 60 percent to 80 percent, and it only impacted unpaid posts.

A group of small advertisers is suing Facebook alleging unfair business practices and fraud. In new court filings the advertisers claim Facebook knew about the metrics mix-up in January 2015, well before disclosing it fully. In September 2016, the issue became public after a memo from Facebook to marketers leaked describing the metrics mishap. Facebook went on to apologize and change how the platform provides measurement tools for advertisers.

The lawsuit also claims Facebook understated the metrics inaccuracy, and that average view times were inflated up to 900 percent.

Crowd Siren, a Las Vegas marketing agency that is one of the plaintiffs in the lawsuit, did not return a request for comment.

"It's possible that Facebook was aware of the problem in some quarters ahead of time and not aware in all of them," says Brian Wieser, senior analyst at Pivotal.

No advertisers overpaid or were billed incorrectly as a result of the metrics problems. But there were concerns that inflated video metrics could mislead brands into thinking Facebook was more valuable than it really was, and that could impact their spending considerations.

Since the initial reporting problem, Facebook has revamped how it reports to advertisers. For the first time, it allowed the Media Rating Council to audit its data, a process that is still ongoing. It also began working with third-party measurement firms, so they could provide independent analysis to advertisers.

The metrics fallout was quickly followed by the 2016 U.S. presidential election, which uncovered problems with fake accounts spreading disinformation. Also, discriminatory ad practices were uncovered within the past two years that showed Facebook could be used to target employment and housing ads to certain groups while avoiding others. Facebook has since adjusted how buyers can set ad targets.

"This lawsuit speaks to the relative sloppiness of the organization at Facebook," Wieser says.

Wieser has been a vocal critic of Facebook's myriad problems and pointed out that it faces other lawsuits regarding metrics. A complaint was filed against Facebook in August regarding potential ad reach.

Facebook's ad platform gives brands an estimate of how many people they can reach in certain regions and age groups, and sometimes the universe of people is larger than U.S. Census estimates would suggest is possible, Wieser said.

"No one is blaming Facebook for actively seeking to mislead," Wieser says. "But it does seem awfully convenient that it's always in their favor whenever there's a mistake."

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