Zuckerberg downplays Facebook advertising screwup
– NY Post
“Facebook insists it’s no big deal that it inflated numbers on viewership of its video ads — but some advertisers aren’t buying it.
Mark Zuckerberg’s social-networking giant apologized Friday as it admitted that, for the past two years, it has overestimated the amount of time users spent watching video ads by as much as 60 to 80 percent.
Specifically, Facebook said it had only included video views of 3 seconds or longer when calculating the average length of a video views it showed to advertisers, leaving out shorter times that would have brought down the averages.
The “discrepancy,” as Facebook called it, distorted its numbers to its advantage as the company ramped up a fierce battle with Google’s YouTube division for video ads — the most lucrative segment of internet advertising.
Facebook claimed the screwup didn’t affect its “billing” because technically its ad rates are based on the number of clicks a video ad gets rather than how long users linger over it.
Nevertheless, metrics on average viewing time are prominently circulated to advertisers. Don’t be surprised if, in the near term, existing advertisers demand reimbursement, and if prospective advertisers hesitate over launching fresh, high-dollar campaigns, experts said.
“Advertisers will be demanding compensation, and I’ll bet they get it,” said Mitchell Reichgut, chief executive of New York ad firm Jun Group.
Facebook initially disclosed the problem on an obscure Web page for advertisers several weeks ago.
“They tried to bury it in a blog,” Reichgut said. “That’s not how you announce something of this magnitude.”
On Thursday, the issue blew up when the Wall Street Journal reported (paywall) that advertisers including Publicis Group were asking questions, forcing Facebook to come clean.”
….Read more @ NY Post
Doubts About Digital Ads Rise Over New Revelations As Facebook Inflates Stats
Advertising industry grapples with questions about viewer metrics, adding to rebate concerns
“Marketers who have been pouring huge sums into digital advertising are wrestling with several recent events that add to a troubling picture: some are finding they can’t be sure how well that money was spent or what they’ve received in return for it.
The lack of transparency that plagues the advertising industry was on stark display this week. Revelations that Facebook Inc. overestimated by up to 80% the average time people spent watching video ads on its platform shocked the media and marketing world.
Meanwhile, Japanese ad giant Dentsu Inc. admitted on Friday it overcharged at least 111 companies for internet ads. The mea culpa was prompted by a complaint from Toyota Motor Corp. that its internet ads weren’t having the promised impact. Dentsu apologized and blamed overworked employees for the overbilling.
At the same time, marketers increasingly are questioning whether their ad agencies accepted rebates from media companies without telling their clients. An industry probe earlier this year into rebates highlighted digital advertising deals as a key area of focus. Companies including General Electric Co., J.P. Morgan Chase & Co., and Nationwide Mutual Insurance Co. have launched audits of their agencies. Ad companies have denied wrongdoing.
These developments add to the nagging sense for marketers that digital advertising—for all its promise as a way to reach consumers who are tethered to mobile devices and are spending less time on traditional media—has real pitfalls and risks.
The lack of transparency and trustworthy measurement in online advertising will be among the issues weighing on ad executives gathering in New York next week for annual Advertising Week festivities. Also on their minds: fears that they are wasting billions of dollars on ads that aren’t “viewable,” or visible to the human eye, or are being shown on sites with computer-generated fake traffic.
The confluence of issues “could be a tipping point” for how marketers perceive digital advertising, potentially denting growth in the $194 billion global digital ad market, saidBob Liodice, chief executive officer of the Association of National Advertisers. The trade group represents large advertisers such as General Motors and AT&T.
“Marketers are reassessing the level of investment in the digital area because they are beginning to question what they are really getting in terms of the return on investment,” Mr. Liodice added.
In Facebook’s case, the company disclosed that the metric it reported for two years for the average time users spent watching videos was artificially inflated, because it only factored in video views of more than three seconds. Big ad agencies pressed Facebook for more details and ad buyer Publicis Media, a division of Publicis Groupe SA, was told that the Facebook error likely overestimated average time spent viewing videos by 60% to 80%, The Wall Street Journal reported.
On Friday, Facebook apologized for the erroneous video metric. “While this is only one of the many metrics marketers look at, we take any mistake seriously,” said David Fischer,vice president of business and marketing partnerships, in a Facebook post.
The Facebook revelation played into a narrative among some Madison Avenue executives that large online platforms are unaccountable “walled gardens,” doling out limited information on how media or ads are consumed on their platforms.
“The primary concern for me is the walled garden needs to disappear and they need to be treated like other vendors with a level playing field,” said Ron Amram, vice president of media at Heineken. He said he and his agency are meeting with Facebook next week to discuss the impact of the metric discrepancy.
The news holds implications for companies competing with Facebook for ad dollars, from legacy publishers to, increasingly, TV networks. Facebook has been gaining momentum—it has a 22% share of the $46 billion U.S. mobile ad market, according to eMarketer, and its mobile ad revenue jumped 80% in the latest quarter. Those competitors are looking for ways to drive a wedge between the tech giant and advertisers and might look to exploit the video metrics snafu.
Sites including Facebook, YouTube, Twitter and Snapchat boast of the number of people watching videos on their services.
By contrast, Nielsen ratings in the TV business serve as the standard currency for ad deals. While ad buyers and TV networks have made a sport of complaining about Nielsen ratings data for years, marketers are happy to have an independent party to rely on.
Big online platforms are “telling you what they are worth and it’s difficult to verify it,” said Mr. Leech. Still, Mr. Leech isn’t ready to cut his digital spending.”
….Continue reading @ Wall Street Jounal
Lying, Cheating, Fraud: Is Facebook Video Too Good to Be True?
– Contently.com | Aug 2015
“For months now there have been rumblings of a controversy around Facebook video. Yesterday, those rumblings finally became something of an earthquake.
Hank Green, brother of author John Green and co-host of their highly successful YouTube channel VlogBrothers, wrote an incisive Medium post that voiced the collective frustrations of digital video creators. Green accused the powerful social network of “lying, cheating, and stealing” its way to the top of the digital video space—swindling content creators, and even advertisers, along the way.
Green focused the piece on those three accusations, beginning with “cheating.” His claim revolves around the astronomical views Facebook touts for its native videos compared to the small amount the same videos will get if they are externally hosted (namely, if they are links to YouTube). He backs up his argument with a narrow study, done by Duke University’s social media team, which shows the huge gaps in engagement between native video they published on Facebook and YouTube links that were posted on Facebook. Of all Green’s issues, this one is the least heinous. It’s not really cheating: Facebook predictably gives its own product preferential treatment, and there is a fair chance this is just Facebook’s algorithm responding to user behavior. The difference in engagement should be attributed more to Facebook video’s autoplay feature and a more attractive presentation than any sort of shady number fudging.
But then Green moves onto “lying,” a more severe allegation meant to draw attention to the notoriously low bar that qualifies as a video view on Facebook. Unlike YouTube, which counts a view after 30 seconds (and draws most of its views from direct search or clicks—more purposeful actions than autoplay), Facebook has defined a view as three seconds. Considering that most video views come from users scrolling past autoplaying, muted videos, it’s hard to see this paltry standard as anything more than a strategy to inflate view counts. Green then provides two charts (see below) to show that if Facebook followed the same standards as YouTube, view rates would be much smaller. Viewer retention at 30 seconds on Facebook sits at 21 percent, while YouTube can boast an 86-percent retention rate for organic views at the 30-second mark.”
…Read more @ Contently.com