MANILA, Philippines – On Tuesday, October 16, a group of advertisers from California filed a class suit against social networking giant Facebook. This time, it is not a case of data privacy issues – it is a case of fraud.

How did this happen?

In September 2016, The Wall Street Journal reported Facebook had “vastly overestimated average viewing time for video ads on its platform for two years” by as much as “60 to 80 percent.”

However, the lawsuit claimed Facebook failed to disclose it had known about the discrepancy for at least a year.

“Facebook did not discover its mistake one month before its public announcement,” the lawsuit said. “Facebook engineers knew for over a year, and multiple advertisers had reported aberrant results caused by the miscalculation – such as 100% average watch times for their video ads. Yet Facebook did nothing to stop its dissemination of false metrics.”

The lawsuit also alleged Facebook’s records showed the impact of its miscalculation were more severe than reported. Average viewership metrics were not inflated by only 60% to 80%; they were inflated to a whopping 150 to 900%.

“The inflated metric thus made video ads appear as if they were performing much better on Facebook than they actually were,” one of the allegations in the lawsuit said.

A report from WIRED says Facebook refused to comment on the lawsuit or answer questions quoting its internal documents. Facebook has also filed a motion to dismiss the claims of fraud.

This development does not only affect advertisers who bought into the entire pivot to video schtick, but also publishers, content creators, and media outfits who have seamlessly integrated producing social videos into their respective workflows.

This pivot was touted by no less than Facebook CEO Mark Zuckerberg himself as the harbinger of the “new golden age of video.”

“I wouldn’t be surprised if you fast-forward five years and most of the content that people see on Facebook and are sharing on a day-to-day basis is video,” Zuckerberg said in an interview with BuzzFeed News back in April 2016.

Of course, publishers and advertisers alike bought into Zuckerberg’s sweet talk hook, line, and sinker. Then months after, the Wall Street Journal story broke out.

Inflated metrics, fickle algorithms

When gauging performance, advertisers and publishers alike cannot – and will not – argue with data when it comes to decision-making. But what if the data, at the source level, is inherently flawed?

More specifically, what if a video isn’t performing as well as it is made out to be?

The lawsuit says that Facebook told advertising purchasers that the metric Average Duration of Video Viewed was the “total time spent watching a video divided by the total number of people who have played the video.” Simple and straightforward enough, right?

Not quite. In August 2016, Facebook disclosed that the Average Duration of Video Viewed and Average Percentage of Video Viewed metrics had been improperly calculated. Facebook calculated the average time people spent watching a video by dividing the cumulative time spent watching it by the number of views. But it only counted views that lasted at least three seconds. The result? An overstated metric.

David Fisher, Facebook’s VP of advertising and global operations, has admitted to the error. “As soon as we discovered the discrepancy, we fixed it,” Fisher said in a Facebook post published September 23, 2016. “We informed our partners and made sure to put a notice in the product itself so that anyone who went into their dashboard could understand our error.”

But the lawsuit countered Fisher’s claims. “Even once Facebook decided to correct the false metrics, it chose not to do so immediately. Instead, Facebook chose to continue disseminating false metrics for several more months while it developed and deployed a ‘no PR’ strategy designed to ‘obfuscate the fact that we screwed up the math.’ All the while, Facebook continued to reap the benefits from the inflated numbers.”

One thing worth noting, though, is how Facebook counts its views. Facebook counts a view if a video plays for at least 3 seconds, and good chunk of video views are generated through autoplay – which is the default setting. Meaning, if you are mindlessly scrolling through your Facebook news feed, and a video starts rolling because of autoplay, if it goes on for at least 3 seconds, it counts as a view. Even if you have no intention of watching it.

Show me the money

When Facebook announced that it was making the pivot to video, publishers hailed it as the disruption the media industry needed. With real-time, highly visual material in the world’s largest social media platform, how could you possibly go wrong?

Because of this pivot to video, and because of the numbers Facebook videos delivered, publishers were quick to cash in. Publishers like Vice and MTV laid off writers to focus on video. Reporters, bloggers, and government offices alike turned to Facebook Live to broadcast in real time.

This continuous shift, in effect, held both advertisers and publishers hostage. The combination of high views and competitive engagement rates were promising, but the only ways to monetize were through branded content and Instant Articles.

It wasn’t until recently when Facebook rolled out Ad Breaks, which are in-video programmatic ads. As of writing, programmatic ad monetization for video has yet to roll out worldwide, with Thailand the only Asian country eligible for video ad breaks so far.

But here’s the most recent snag of the pivot to video movement: In early 2018 Facebook announced that it would deprioritize content from pages in favor of posts from direct contacts.

“Video and other public content have exploded on Facebook in the past couple of years,” Zuckerberg wrote on his Facebook page in January 12. “Since there’s more public content than posts from your friends and family, the balance of what’s in News Feed has shifted away from the most important thing Facebook can do – help us connect with each other.”

No longer in the algorithm’s favor, and with a programmatic ad network still in its infancy, what’s next for publishers, advertisers, and creators whose content plans have gotten video-heavy with the hopes of cashing in on the pivot?

So much for “the golden age of video” Zuckerberg has been so chirpy about two years before.  – Rappler.com