While Facebook's stock has continued to boom throughout 2016, this year has been full of PR nightmares for the world's most popular social network, which, among other things, has been accused of censorship, grilled by the US Senate and sued by the IRS in recent months. On Thursday, however, that bad press finally became something that could hurt its bottom line when news broke that Facebook juiced a key stat to advertisers, inflating it by "60 to 80 per cent" for years. Photo: AP
According to a new Wall Street Journal report, Facebook admitted to grossly overestimating its crucial "Average Duration of Video Viewed" metric for two years, only counting videos watched for more than three seconds. That might sound like a relatively minor transgression, but given that marketers use that data to direct their ad dollars, the "60 to 80 per cent" discrepancy amounts to a major screw up.
— Jack Dickey (@jackdickey) September 23, 2016
"We recently discovered an error in the way we calculate one of our video metrics," said Facebook in a statement. "This error has been fixed, it did not impact billing, and we have notified our partners both through our product dashboards and via sales and publisher outreach. We also renamed the metric to make it clearer what we measure."
In a memo to clients, however, the ad company that first got Facebook to reveal the severity of the "error" slammed the social giant, writing, "Two years of reporting inflated performance numbers is unacceptable."
"In an effort to distance themselves from the incorrect metrics, Facebook is deprecating [the old metrics] and introducing 'new' metrics in September," wrote ad buyer Publicis Media, according to the Journal. "Essentially, they're coming up with new names for what they were meant to measure in the first place."
Oh well, there's always next year, right?