Facebook Inflated Key Video Metrics For Two Years

Facebook Inc. (NASDAQ: FB) apologized for miscalculated a key video metric for two years that upset the big ad buyers and marketers, sending stock shares down 1.8 percent on Friday.

Facebook disclosed that it overestimated the average time users spent watching videos in a post on its “Advertiser Help Center” several weeks ago. The video metrics was miscalculated as it had been factoring in video views of three seconds or more. The company said it would introduce a new metric to fix the problem.

On Thursday, the Wall Street Journal reported that Ad buying agency Publicis Media was told that the previous counting method had overestimated viewing time by between 60 percent and 80 percent and it was upset about that.

On Friday, David Fischer, vice president of business and marketing partnerships, apologized in Facebook post. “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. While this is only one of the many metrics marketers look at, we take any mistake seriously.”

Facebook stock was down 1.7% on Friday.

“We want our clients to know that this miscalculation has not and will not going forward have an impact on billing or how media mix models value their Facebook video investments,” Mr. Fischer wrote.

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