Thread: SCANDAL: Facebook Bilks Advertisers Out of Tons of Cash, Inflated Video Views Between

SCANDAL: Facebook Bilks Advertisers Out of Tons of Cash, Inflated Video Views Between 150 to 900%
Published
2 hours ago on
Oct 17, 2018
By
Haley Kennington

For over a year, Facebook inflated ad-watching metrics by up to 900%. What’s worse is for over a year, the social media giant knew that its average-viewership estimates were wrong, but kept quiet rather than telling their advertising partners, according to new legal filing claims filed on Tuesday in Oakland.

A group of small advertisers suing the social media titan alleged in the filing that Facebook “induced” advertisers to buy video ads on its platform because advertisers believed that Facebook users were actually watching the video ads for a much longer time period than they actually were.

That “unethical, unscrupulous” behavior by Facebook constituted fraud because it was “likely to deceive” advertisers, the filing alleged.

The social network acknowledged it had miscalculated key metrics in 2016, saying it had “recently discovered” it. The firm told some advertisers that it had more than likely overestimated the average time spent watching video ads by 60-80%, but that the issue was only for the course of a month.

The amended claim, filed by Las Vegas marketing firm Crowd Siren and video advertiser Jonathan Murdough on Tuesday, said that Facebook knew about the flaws in measurement as early as January 2015 – and that the issue was much more severe, inflating video views between 150 to 900%.

“Even once it was decided to take action on the metrics, Facebook did not promptly fix its calculation or disclose that the calculation was wrong,” the filing alleged.

“Instead, it continued reporting miscalculated viewership metrics for another several months, as it developed a ‘noGoogle Page Ranking strategy to avoid drawing attention to the error.

“If Facebook had immediately corrected its miscalculation in a straightforward manner, advertisers would have seen a sudden and precipitous drop in their viewership metrics. They also would have seen that they had spent considerable money on past advertising campaigns that were not enjoying anywhere near the average viewership that Facebook had represented.”

Facebook disputed the allegations, saying the lawsuit was “without merit” and noting it had filed a motion to dismiss the fraud claims.

“Suggestions that we in any way tried to hide this issue from our partners are false,” the company said in a statement. “We told our customers about the error when we discovered it — and updated our help center to explain the issue.”

The latest round of allegations came about from a lawsuit that the advertisers filed against CEO Mark Zuckerberg in federal court in 2016 over alleged inflation of ad-watching metrics. The plaintiffs said in the recent filing that their new claims are based on internal Facebook documents that have been obtained through the court process, according to Mercury News.

Yet another set of accusations against the embattled company, which has been trying to win back the faith of their users for the past year, after several data hacking nightmares, including the Cambridge Analytica Scandal.

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