Facebook Knew of Inflated Video Ad Metrics for a Year Before Disclosing Them, Lawsuit Alleges

After the Cambridge Analytica fiasco and the recent security breach of millions of accounts' private data, Facebook is now in the headlines due to litigation from a small group of advertisers alleging that it withheld information regarding a video metric goof-up for a year. According to the plaintiffs, Facebook knew of a mistake in the method in how it measured viewership of video ads since January 2015, but disclosed it to its advertisers in 2016. The litigation notes that this inflated and erroneous data caused advertisers to push more money into Facebook, giving it more preference over other available platforms.

These advertisers filed a lawsuit in 2016 in the California federal court, but have now added a fraud claim, and shared unredacted documents in this week's filings, alleging that Facebook knew of this error since January 2015 but informed advertisers a year later. It withheld information even after it understood the nature of miscalculation in 2015 itself. The inflated data, due to Facebook's calculation errors, showed a 'vastly overestimated average viewing time for video ads. '.

The litigation claims that Facebook counted only video views that lasted more than three seconds when calculating average duration of video views, and all views under three seconds weren't factored in at all. This inflated the average length of a view, something that Facebook found out in 2015 itself. In 2016, when Facebook did disclose the error to its advertisers, it claimed that 'it recently had discovered the issue', though the litigation claims that the tech giant knew of it since a year.

Furthermore, Facebook said that it likely exaggerated average time spent watching videos by 60 percent to 80 percent, but the plaintiffs allege that the error was much larger and that the average viewership metrics had been inflated by as much as 150 percent to 900 percent. While Facebook maintains that it didn't affect billings, advertisers claims that the inflated data made them purchase video ads and pay more to Facebook, and focus less on other available options.

Facebook asserts that the lawsuit is without merit and dismisses the fraud claim altogether. The company's spokesperson told WSJ, "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 centre to explain the issue."

Ever since it disclosed the metric error to advertisers, Facebook has allowed more third-party measurement companies to validate its data, and allows regular audits by the Media Rating Council.