Facebook Faces A (Yet Another) Lawsuit for Inflating Video Metrics
It’s a known fact that Facebook has been wooing advertisers and publishers for years. From beach reach to video series, the company sweats to ensure its garden is watered properly. However, the trust factor keeps crumbling with the rise of scandals and lawsuits.
More recently, a group of marketers filed a lawsuit against Facebook for misleading them by inflating the video metrics back in 2016. Though Facebook admitted the issue and apologized for screwing up the video metrics, the plaintiffs now charge with a different argument – Facebook knew the error and didn’t inform the advertisers for over a year intentionally.
What’s the defender saying?
“This lawsuit is without merit and we’ve filed a motion to dismiss these claims of fraud. 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 center to explain the issue.”
What was inflated?
Average duration of video viewed and Average percentage of video viewed were erroneously calculated because Facebook only considered video views over three seconds while calculating the metrics.
Ideally, it should have included every video views (not just the ones over 3 seconds). This, in turn, made the marketers think Facebook videos were retaining more users.
Talk of the town
You might be wondering why it’s the talk of the town now. It’s a two-year-old error and a few marketers with ‘Facebook already knew it’ as an argument has filed the lawsuit (ahem, there’s nothing eye-opening in this).
Well, here are the reasons.
– Advertisers:
As mentioned earlier, Facebook might have attracted far more advertisers than it could have without the inflated metrics. And, a substantial percentage of marketers agreed so.
– Publishers:
The impact on the publishers’ side is no less than that of advertisers. In fact, journalists have already begun to scrutinize the inflation.
If you missed it: today it was confirmed that Facebook massively & knowingly inflated its video-view statistics, which had the DIRECT consequence of 90% of media orgs firing writers in favor of expensive video producers, who also got fired when it turned out video was worthless https://t.co/WqdAUBIe6L
— Chris Conroy (@dyfl) October 17, 2018
Takeaway:
Facebook has been playing around the metrics and measurements for the last few years. It got accreditation from the MRC and devised a Measurement Council, however, faced several criticisms from both the sell-side and the buy-side. We believe it has the ability to satisfy the advertisers and that’s keeping the ship afloat in all the storms.
Transparency At Scale
In our last week’s roundup, we discuss how the ad fraud issue in the industry is ballooning. And, lack of transparency can be cited as one of the top 10 issues easily. However, we’re now seeing a pact signed by six major exchanges to fight against obscurity in ad tech.
What’s it all about?
The pact comprises three principles which should be pursued by the participating exchanges (so far Rubicon Project, OpenX, PubMatic, Sovrn, SpotX, and Telaria) to drive the programmatic landscape towards a better future.
– Efficiency
By assuring the quality of ads, standardizing formats, and eliminating infrastructure waste, the efficiency will be improved.
– Transparency
To clear the smog, a transparent fee structure, fully auditable supply chain, and changes notifications will be included in the ecosystem.
– Fair-Market
In order to maintain a fair-market, clear auction rules and auction mechanics will be included.
How is it different from other TAG initiatives?
Not just you, everyone in the industry are still questioning the significance of the initiative. As TAG has just over 100 companies under its belt, how can this pact scale and attract a larger number of ad tech vendors?
Well, the answer is unpredictable. We need to wait and see how the principles are going to be enforced into the ecosystem. Leaving aside the ability of scale, we can assure you one thing – This is the right step and participants will earn trust on a long run.
First Price Auctions – Is It Good Or Bad?
First price auctions are gaining traction. Almost half of the programmatic impressions are sold through first-price auctions, as per source. But, where are we headed?
Last week, eMarketer reported that first-price auctions are driving up the ad prices considerably. The vendors have started shifting to first-price auctions which accelerates the growth of this auction type.
POC
Ad agency Heart & Science ran a test to compare the first-price auctions with second-price auctions. The agency bought impressions across 15 publishers and found that CPMs were 59 percent higher in first-price auctions.
In addition, the agency tried its hands on bid shading (Bid shading splits the difference between first-price auction and second-price auction to ensure buyers aren’t paying the full price). Surprisingly, the results were more or less the same. The CPMs were still higher than 54 percent that that of second-price auctions.
Are the advertisers ready for the first-price auctions?
As obviously, publishers would like to move towards first-price auctions because of higher CPMs and revenue. On the other hand, advertisers aren’t willing to completely shift the auction yet. Besides, the ad fraud concerns prevent advertisers from paying the higher CPMs for programmatic inventories.
What Internet Users Think of Ads?
A new report from eMarketer surfaced last week to show the state of digital ads on consumers’ mind. We’ve highlighted a few interesting facts that you need to know.
Stop Following Me
More than 40 percent of the users responded that ads are too aggressive in following them on every device and browser.
What does this mean?
The tracking pixels and retargeting companies are doing well. But both publishers and advertisers should take a look at frequency capping again.
Ads, Ads, and Ads
Another survey by WPP’s Kantar Milward Brown showed us the users feel there are ads everywhere. A whopping 79 percent of responders say that ads are appearing in more places now than they were back in 2015.
What does this mean?
The rise of ad networks and ad units across the open internet. In fact, more and more publishers are increasing the number of ad units to improve their revenue. We can assure you that it will only increase bounce rate, not revenue (on a long-term).
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