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According to a complaint filed Tuesday by advertisers, Facebook Inc. was experiencing problems in the way it measured the audience of video ads on its platform for more than a year before disclosing them in 2016.
A group of small advertisers filed lawsuits in a California federal court in 2016, alleging that the technology giant had behaved unfairly by spreading inaccurate statistics that significantly overestimated users' time watching ads. video.
The plaintiffs later added a complaint for fraud and, in Tuesday's filing, Facebook learned that Facebook was experiencing irregularities in its video statistics and understood the nature of the miscalculation in a few months, but n & # 39; Has not disclosed the information for more than one year.
This filing followed the complainants' review of some 80,000 pages of Facebook internal documents they had obtained in court proceedings.
The complaint, which quotes Facebook's internal documents, also alleges that the magnitude of the miscalculation was far worse than what one understands.
"Facebook's internal efforts behind the scenes reflect a reckless indifference mentality about the accuracy of its statistics," the plaintiffs said in a statement on Tuesday.
In a statement, a spokeswoman for Facebook said: "Any suggestion that we have tried to hide this problem from our partners is false. We reported the error to our customers when we discovered it – and updated our help center to explain the problem. "
Facebook said the lawsuit was unfounded and decided to dismiss the complaint for fraud.
The plaintiffs in the case include Crowd Siren, a small Las Vegas marketing agency, and Jonathan Murdough, a resident of Pennsylvania who has purchased video ads on Facebook.
The lawsuit, seeking class action and punitive damages, stems from a September 2016 report by The Wall Street Journal that Facebook has significantly overestimated the average viewing time of video ads. . Facebook revealed the problem in a message posted in its help center advertisers in August.
The mistake and the way Facebook has treated it has become a critical moment in the relationship between the social media giant and the marketers who pay their bills. Many brands were already skeptical about the practice of Facebook and other tech giants to closely protect their internal advertising data. One of the leaders compared it to "classifying their own homework". The incident sparked new calls asking Facebook to allow for independent measurements and audits.
Mitigating the concerns of marketers is important for Facebook, which is looking to invest a larger share of online video advertising spending in the US, which is expected to increase 30% this year to $ 27.8 billion . According to eMarketer, Facebook is expected to account for nearly 25% of video advertising spend in the United States.
For two years, Facebook had only counted video views of more than three seconds in the calculation of its metric "average video viewing time." Video views of less than three seconds were not taken into account, which inflated the average duration of a view.
Facebook has replaced the metric with "average reading time," which reflects video views of all lengths.
After revealing the problem in 2016, Facebook said in a statement that it "recently discovered" the error.
Facebook told some advertisers that it probably overestimated the average time spent watching videos by 60% to 80%. The plaintiffs alleged in Tuesday 's complaint that the error was much greater and that the average hearing figures had been inflated from 150% to 900%.
Facebook also said at the time that the error did not affect billing. However, in their complaint, the plaintiffs claim that Facebook's false statements "incited" advertisers to buy video ads and pay more for Facebook's video ads, believing that users were viewing videos longer than they would have liked. were on average.
The claims that Facebook did not act when it discovered the metric error in the video were from August, but were heavily redacted at that time. In the latest version of the complaint filed on Tuesday, these requests have not been redacted.
The plaintiffs allege that Facebook's documents show that in July 2015, the company had received requests from several advertisers for video metrics that appeared suspicious and had essentially determined the cause of the problem.
In June 2016, nearly a year later, a Facebook technical manager, responding to the complaints of advertisers, had debated the problem internally and had written: "In one way or one" other, the task has not progressed for the year ". The plaintiffs also allege that the company has "no public relations" strategy to avoid attracting attention on the subject.
Facebook decided to "hide the fact that we ruined everything," the complaint said, quoting Facebook documents.
After the video-metric error, Facebook repeatedly revealed other errors in its measurement methods and the advertising industry lobbied for changes to be made.
The National Advertisers Association, a professional group representing leading marketers, including Procter & Gamble Co., General Electric Co. and Verizon Communications Inc., has asked the company and other major distributors digital advertisers to allow independent verification of their statistics.
Facebook has been working to solve the problem by allowing more third-party measurement companies to validate its data and by submitting to audits of the Media Rating Council, the media industry's monitoring body.
Jason Kint, CEO of Digital Content Next, a professional organization that represents online publishers, said Facebook's measurement practices had hurt the digital advertising market. "Facebook needs to be radical about marketing and consumers to overcome this problem. We have not seen it yet, "he said.
Aruna Viswanatha contributed to this article.
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