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It's not overblown if you're lying to advertisers about the quality of impressions their ads received, and lying to investors about it too...especially when your stock has rocketed to making Facebook easily in the top 10 largest corporations in the world.

Not only that but Facebook actively brags about video impressions in their conference calls. This is fraud. I think this is something that should be investigated by the SEC to be perfectly honest. Doesn't mean they should be charged, just investigated; because if they are misreporting this, what other metrics are they misreporting to shareholders?

> quality of impressions their ads received

My understanding is that they only counted it as an impression if it was a view for at least 3 seconds. If anything, including non-impression views is lying about the quality of impressions their ads received, because they're not impressions.

I don't know if that's how video ad impression data is normally reported, but it sure sounds more intuitive to me.

> quality of impressions their ads received

I don't disagree, but FWIW the ads still had better ROI than Facebook's competitors, so the oversight (while embarrassing) may not have actually changed the willingness of ad buyers to pay for ads.

Better ROI than competitors. Did facebook tell you that?

Any modern advertiser knows their ROI from different channels. As a big FB spender, this doesn't effect us at all.

FB has more information about other channels than you do, I.e. for all you know they have algorithms favoring users to see FB ads that are on path that usually leads to your site based on FB pixel tracking. Then all the multi-attribution ROI of FB is nonsenses but you have no idea.

I'm not saying they are doing that, I am saying be especially careful with anyone in advertising who is misleading and who doesn't try to protect their reputation by being exact in what they say.

Regardless, dollar for dollar, if people are seeing bigger conversions or returns it doesn't matter whether they came from display advertising or 'organic content'.

If they buy something, who cares?

If someone is intentionally adding correlations using predictive information then they are stealing money you did not have to spend on traffic that was inevitable. It is like standing inside your waiting room to hand out your buisiness cards then claiming the sales commission.

If you have independent metrics of your own spend, then no, facebook didn't tell you. But you'd have had to have had similar spends in similar ways with all their competitors to know that.

Speculation on alternatives won't have a bearing on an investigation into the legitimacy of their claims.

Comments like these should have disclaimers about the author's position on the stock.

What specifically is the lie here? That they report average view time without trivial views? That seems like a more useful metric.

You also can't really directly compare these simple metrics across sites as they don't get at customer lifetime value. With these simple metrics you run into problems where the average video view may be higher on site A, but the average spend for users is higher on site B, and simply following the metric will lead you to an ineffective campaign. Whose responsibility is it to effectively manage an advertising campaign?

While I agree that more oversight and transparency is welcome here, I think jumping out and calling it fraud is exactly the kind of reaction that makes me feel this is overblown.

Brick and mortal local retailer here. I spend over $100,000 annually on advertising in my local market. That is all digital at this point. Facebook video is a significant chunk.

The lie is about the effectiveness of video on Facebook.

I directed a fair amount of additional ad spend to Facebook precisely because Facebook users on average seemed to be giving a lot of attention to videos on the platform, even if they were promoted. It actually seemed like there was finally something that could work to replace the kind of lift we would see from TV advertising 5-10 years ago.

This calls that into question (which may be putting it mildly). It also calls into question all of the other metrics Facebook provides advertisers.

Does the additional ad spend convert to an acceptable lift in sales? If yes, why do you care about video engagement? If no, why maintain such spend even if the engagement numbers are genuinely high?

How could anyone possibly know? You maintain spend because Facebook claims it's providing value. There's no way to actually know this with any certainty, and Facebook manipulating their figures doesn't add clarity in the least. That's why this whole issue is important — these people are spending millions on ads because of the numbers Facebook reports. Then people are spending millions more on stocks because of the profit generated by aforementioned hand waving.

Statistical measurement of lift in sales.

Most small advertisers wouldn't be able to do this, and attribution is hairy as hell, but the options for measuring this are there.

This is a bias of online thinking. Brick and mortar retail doesn't really know the conversion rate on ad spend. The old adage is that you are wasting half of your advertising spend, but the problem is that you never know which half.

So, we make decisions based on imperfect information. When it was TV or Radio ads, there were 3rd parties that measured the market and reach of the station. With Facebook, Youtube, etc we have to take their word for it.

You don't measure the conversion in case of a brick and mortar vendor. But you can still measure proxy values for effectiveness: an uptick in sales volume or number of clients after after starting a campaign, for example.

But we aren't just running one form of advertising at a time, so what to we attribute the uptick?

Also, our marketing doesn't exist in a vacuum. Weather, competitors, a traffic jam down the street, variations in employee performance, etc all impact the performance as well.

It's not like we can just A/B test Facebook video ads vs Pandora Ads and pick the winner.

So, we shift our budget based on the available information.

And the average video view length is part of the information that we used to make decisions.

I'm confused. you seem very confident that facebooks video marketing is a lie, even while you admit being unable to attribute sales.

I know multi-touch is hard, but doesn't that mean you should be less confident in your statements because the data is fuzzy?

He said that he used the avg view length on FB as a reason to choose that channel. If he had know that they didn't factor in <3 sec views he would perhaps not used that channel.

If the ads boosts sales, use them. The speciffic number seconds they are shown is irrelevant. You will have to do your own analytics anyway.

> Duh, just solve the fundamental problem that has plagued advertising since the birth of the industry!

That's kind of why Facebook/Google was ever supposed to be valuable: they empower the analysis. How do you do good analysis with bad inputs?

You don't really.

But assuming the FB/Google reported numbers are accurate, would you pay for them and just convince yourself they are actually increasing your sales?

You should be able to at least plot sales numbers against ad spending per week over a year.

Facebook also "should" be able to report numbers in a way that isn't misleading to their customers.

Inputs are not good or bad, they are better or worse.

In the 1300s, feedback to the advertiser took years.

In the 1900s, months.

In the 1960s, you could now measure the effect of blanketing a MMR with ads, and see how sales there compared to nationally.

This century, you have still-imperfect, yet much better than before, attribution.

Good analysis in the 1930s was different than now. Good marketing was the same, but with cruder tools.

Ah, classic courtroom fraud defense. "Feel fortunate you even caught me; that would've been impossible a century ago!"

Having wiggle room on numbers isn't a bad thing. Lying about the amount of wiggle room on said numbers is.

You can do the analysis that you want, there's no proof that advertising increase something. They are bad and should be banned from our live.

See my reply to the comment above. With local retail, you can't just measure the conversion rate.

It is not about the specific number of seconds. It is about the implied engagement and focus of the audience. It is about a reported difference in the behavior of Facebook users vs other online properties.

You never can. But are you just going to blindly spend money on ads and just believe they work?

Yeah, that is basically the entire advertising industry. Precisely what "brand exposure" is.

What did they define the metric as prior to this 3 second revelation?

The one thing that would make it misleading is if they reported the average time excluding views under 3 seconds, but reported impressions including them. From the article it is not clear that this is the case

I think your comment is the key one. I actually don't see a problem at all with what they've reported IF they also separately excluded views under 3 seconds from their total count of views (i.e. the denominator). If they included them in view count, I would think a lawsuit would be warranted.

This is the piece I've been digging for info on.

The dimensions to break out reporting columns for various view duration percentages has always existed. Any advertiser worth their salt is looking at the breakdown for stats on meaningful views because out outside of cases where your message is delivered in a couple seconds you typically only care about longer views and would just look at those numbers.

So the question is how deep this polluted other metrics.

As far as I understand it, what happens is that views under 3 seconds aren't counted towards the average. So if you have 999 999 views of <1 second each and 1 view of 3 seconds, the reported average is 3 seconds / 1 view = average view time of 3 seconds, while the true average is something like 500 000 seconds / 1 000 000 views.

So they would report that hypothetical as "999 999 views; 3s average"?

I don't think this is overblown. Considering that issues of money and trust are on the line, (and the inverse of trust which is fraud), and we are talking about a company that deals with over $17 billion a year in ad revenues, I'm surprised there isn't more scrutiny on this kind of thing in general.

When an impression isnt made (say 50% in view for 1 second) then no one is getting billed. This is the standard practice for internet advertising.

As far as I know Facebook does the same thing. I haven't read the Facebook advertising documentation in a long time but know that they outline many of their metrics in detail. People haven't been getting overcharged and it hasn't effected billing. From the article: "... 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. This metric is one of many our partners use to assess their video campaigns."

What are the implications of this? "Due to the miscalculated data, marketers may have misjudged the performance of video advertising they have purchased from Facebook over the past two years."

The other part about making it difficult to compare against competitors is true regardless of having the same metric due to site and user differences. Maybe facebook users spend more on average than twitter users after clicking on your ad for an ecommerce site? A/B tests towards the goal you're interested in is much more fruitful from a business perspective then say comparing click thru rates.

I currently spend $X,000 per day in advertising on facebook. Their reported clicks barely match up within an order of magnitude.

I've spent 4 days investigating this, so it's worthwhile to share the data.

For every 100 clicks I purchase, at a strong CPC ($0.10 - $2.00 CPC), I have found: - GA tells me i got between 40-60 sessions - piwik tells me ~70 - server logs show that page was requested ~400x (not indexed, a FB-only lander). I have IP and UA recorded, and both are rotated. My guess is that FB preloads the HTML LP when the impressions shows from mobile, so the browser is primed to quickly load assets (w/o sig resources to d/l images/etc -- just request the page that initially loads all that)

My point is attribution for conversions and link clicks is hard.

Any marketer worth their salt avoids the thought of "I paid for 10 clicks but GA only shows 6".

A better marketer thinks, "I paid $660 to acquire 2 customers. Is that acceptable?"

>A better marketer thinks, "I paid $660 to acquire 2 customers. Is that acceptable?" //

You're right, but that doesn't have a bearing on whether the advertising you bought was fraudulently presented though. Yes you should be wise, but we should still imprison people for fraudulent acquisition of other people's money, even if you still thought you ultimately got a good deal.

This. Experienced marketers know analytics sources will never fully match. That's why you look at things directionally and focus on measuring bottom line impact.

Source: someone who has had to deal with clients who insist that all our various js-based tracking methods should 100% match backend data and each other.

"I currently spend $X,000 per day in advertising on Facebook" you are wasting $X,000 per day period.

uh---what if he is making $X,000 * 2 in sales? Is it still a waste?

Literally every form of fraud ever is detectable and preventable if the victim is willing to dedicate her life to dissecting every metric and cross-referencing with a billion other metrics. How is this an argument? They lied, and it induced people to give them money.

I thought that this metric is supposed to measure the quality of the views that the advertiser is paying for. In that case maybe advertisers shouldn't pay for views under 3 seconds, but if they do it should count towards the average.

Based on the stat in the article about it resulting in 60% to 80% difference in total viewing time, I think they were probably reporting total views including views under 3 seconds and reporting avg view length discounting views under 3 seconds. This results in a pretty misleading viewing time. Still quite possibly a mistake, but I can see why advertisers would be pissed.

Isn't it the advertisers' job to measure the quality of the channel? Or does this kind of advertising have an intangible outcome like brand awareness?

How do you measure video watched on their platform? You can't since they host the video.

You measure the change in your sales while the campaign is active. That's the only relevant metric anyways.

Which is affected by about a billion other metrics, like if it's sunny out. Attribution is the fundamental problem of advertising, and getting closer to solving it is Google and Facebook's value proposition. This indicates that they are not nearly as helpful in solving it as they have been claiming since they've been providing bad inputs for their customers to do analysis.

In order for this to be a real issue, customers must be incapable of attributing sales to advertising campaigns but somehow capable of attributing them to seconds of video displayed. Doesn't make sense.

Yes it does, because getting accurate numbers from Facebook is a key part to calculating either of those things. You definitely can't do it with certainty, but you would hope the entity you're paying to record the data necessary to get as close to possible would in fact be an accurate source of said data.

If you are incapable of measuring the overall ROI of, say, a YouTube campaign vs. a Facebook campaign, then you are also certainly going to be incapable of determining the ROI of an X second average viewing time on Facebook vs. a Y second average viewing time on YouTube.

Therefore both the true and reported values of X are completely irrelevant because you are incapable of using them.

Please explain how the above reasoning is incorrect.

Detecting differences between several Facebook campaigns?

They would both be misrepresented the same way in that case and would remain comparable.

That works for impulse buys online I expect; doesn't seem useful beyond that. If you're running a one day festival you can have fantastic ad response - but if it rains the visitor figures are rubbish.

That's when you rely on metrics like bounce/view period to decide if your advertising worked.

It's perfectly fine to use the metric in question if its definition is clear. However, the definition was apparently not clear and Facebook therefore misled advertisers. Metrics are at the core of Facebook's business. If they don't get this right, that's fairly embarrassing, and raises a lot of questions about their other metrics. Perhaps this was not outright fraud but even if it was mere incompetence that's bad enough.

2 seconds is also Google/DoubleClick's cut-off, they refer to it as IAB standard: "For in-stream video ads, 50% of the ad’s pixels must be visible in the browser window for a continuous 2 seconds."

https://support.google.com/dfp_premium/answer/4574077?hl=en

Yeah. The main purpose of the metric is to compare the relative effectiveness of ads. If each number was off by the same amount, that doesn't affect the delta

... if there's only one advertiser you can buy placements from!!

Or indeed if all advertisers are using the same misleading metric.