Facebook to Pay $40 Million in Settlement Over Inflated Video Metrics
Facebook is set to pay $40 million in a settlement over a case which alleges that The Social Network knowingly inflated its video view metrics in order to attract more ad spend.
The case was originally filed in the California Federal Court in October last year – as reported by The Wall Street Journal at the time, a group of Facebook advertisers claimed that Facebook had engaged in unfair business conduct by providing inaccurate performance metrics which “significantly overestimated the amount of time users were spending watching video ads”.
According to the claim, the average viewership metrics on some videos had been increased by up to 900% as a result of Facebook’s errors.
The case specifically relates to an issue which Facebook has admitted to, and has since corrected, though the advertisers claim that Zuck and Co. didn’t act fast enough as they sought to maximize the potential revenue benefits. The defendants claim that Facebook uncovered irregularities with its “Average Duration of Video Viewed” metrics in January 2015, but then failed to report or act on them till mid-2016. This, they claim, demonstrates a concerted effort to cover-up the mistake.
The settlement would bring to an end a series of embarrassing, back-end metric errors which plagued Facebook back in 2016, and from which The Social Network is still working to recover and establish trust in the data it provides. Many still question, for example, how effective Facebook video advertising is, and how significant the video shift on the platform might be. Some advertisers have claimed to see no major results from their Facebook video ad campaigns, despite the significant increase in spend to create them – and because Facebook’s viewership metrics have been a little wonky in the past, that adds fuel to speculation that, maybe, video isn’t actually the way to go at all.
Of course, various third-party reports have confirmed the increased engagement that videos see on Facebook, over other post types, and there are a range of factors that could lead to an advertiser failing to gain traction with their video content beyond the format alone. But given Facebook’s past slips, such speculation will linger, though Facebook will be hoping that the longer it can go without another, similar controversy, the more such concerns will fade out.
Interestingly, according to The Hollywood Reporter, Facebook has maintained all the way through the trial, and even now, on settlement, that the suit is “without merit.” THR reports that the plaintiffs estimate that, had the case gone to trial, they could have recovered between $100 to $200 million in damages, though the $40 million settlement will give them immediate security.
It’s been some time since we’ve heard reports of any other Facebook ad metric errors, so hopefully, all the kinks are now largely ironed out, and with this case closed, Facebook is able move on from its past mistakes, at least in this respect.