Facebook Apologizes for Video Metric Miscalculation
September 23 2016 - 11:00AM
Dow Jones News
By Steven Perlberg
Facebook Inc. on Friday apologized for overestimating a key
video metric for two years, a miscalculation that irked advertisers
and media companies that have poured resources into video efforts
on the social network.
In a Facebook post, David Fischer, vice president of business
and marketing partnerships, described in greater detail how the
company discovered about a month ago the error in calculating the
average time users spent watching videos.
"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)," Mr. Fischer wrote.
"And so the miscalculation overstated this metric. While this is
only one of the many metrics marketers look at, we take any mistake
seriously."
The Wall Street Journal reported Thursday that ad buying agency
Publicis Media was told by Facebook that the earlier method likely
overstated the metric by between 60% and 80%. That discrepancy
means that marketers could have misconstrued the performance of
video ads, affecting their decision making when it comes to
spending money on Facebook versus competitors like YouTube, Twitter
or even television.
"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.
Mr. Fischer said that Facebook noticed the discrepancy about a
month ago, fixed it and notified its partners. He also said that
the miscounting did not impact other figures, like number of video
views. "We sincerely apologize for the issues this has created for
our clients," Mr. Fischer wrote.
Facebook stock was down 1.7% on Friday morning.
The error has stoked fears, long percolating in the media
industry, about the "walled gardens" that publishers and
advertisers believe tech giants like Facebook and Google operate.
Facebook allows only limited access to third-party measurement
specialists to plug into their systems.
"We know we can't have true partnerships with our clients unless
we are upfront and honest with them, including when we make
mistakes like this one. Our clients' trust and belief in our
metrics is essential to us and we have to earn that trust," Mr.
Fischer wrote.
"That is why we also give marketers choice by offering
third-party video verification options with companies like Nielsen
and Moat. We want marketers to measure video with us in the way
they feel most comfortable, " he wrote.
A letter Publicis Media sent to clients, reviewed by The Wall
Street Journal, said the metric issue "once again illuminates the
absolute need to have 3rd party tagging and verification on
Facebook's platform. Two years of reporting inflated performance
numbers is unacceptable."
Write to Steven Perlberg at steven.perlberg@wsj.com
(END) Dow Jones Newswires
September 23, 2016 10:45 ET (14:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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