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Facebook is on the back foot. Again.
On Tuesday, a group of small advertisers added a complaint to a two-year lawsuit accusing Facebook of not reporting measurement problems for more than a year. The group claims that Facebook misstated an error in calculating the time spent watching videos.
While Facebook apologized in 2016 for measuring 60% to 80% of time spent measuring a video incorrectly, the lawsuit claims that the metric was inflated by 150% to 900% and that Facebook was aware of it. the difference since a little over a year.
Since then, Facebook has taken a number of steps to clean up its parameters, including setting up a measurement board and submitting to an audit by the Media Ratings Council to verify its settings for third-party reports. But that did not help in addition to the statistics crisis, Facebook also had to deal with the Cambridge Analytica scandal and its recent hacking of 50 million users.
These problems are collectively the cause of the loss of confidence of some marketers in Facebook.
Facebook's series of problems undermine advertisers' confidence
While the lawsuit is two years old, marketers say the combination of problems is a source of trust for advertisers.
"From the point of view of overall trust, this is another unexpected black eye and there are not enough dark eyes to make that happen," said Mike Mother, founder and CEO of WPromote, an advertising agency that works primarily with direct response advertisers. "If you think about planning for 2019, yes, overall, it all depends on what works – so I do not think there's a lot of boycott – but trust has a material effect. "
WPromote customers primarily use third parties and conversion metrics to gauge ad success, rather than the video views often used by leading brands to measure ads. This means that Facebook's measurement problem chain has not hit budgets.
"We have not received many calls asking us:" What happened? Does this mean that my expenses over the last three years have been bad? "Said the mother.
But it can be a different story for advertisers who are not performance-based.
"This could be problematic to the other type of advertiser, the brand advertiser." They compared the views and schedules to other items that are not based on performance, you can suddenly have the impression that things are overrated, "said the mother.
Marketers continue to have a difficult relationship with Facebook
After Facebook reported the video calculation error, it reported a number of other incorrect statistics, including bugs in the brands pages and analysis for Instant Articles.
In the case of the poorly calculated video metric, "we always knew that the numbers did not look good," said David Herrmann, director of advertising at Social Outlier. "From my point of view, Facebook says" go on video "and I have never listened to them, and this has been proven."
But he added that he did not expect advertisers to cut their budgets because Facebook ads are still converting better than other platforms.
"It would not shock me if people said that they would withdraw from Facebook, but let's be honest, there are not many other places to go, you make a statement more than anything, because it's going to hurt your business. "
But the big profits of Facebook in the fourth quarter could take a hit
Some marketers believe that the lawsuit will affect Facebook's financial statements.
According to Mark Hughes, CEO of C3 Metrics, a measurement company that helps marketers analyze their campaigns, the lawsuit could affect Facebook's fourth quarter results in the same way that Facebook's earnings have Dropped in the second quarter of this year.
Hughes said advertisers had cut spending in the second quarter of this year when CEO Mark Zuckerberg testified before Congress about Cambridge Analytica. Spending has since risen, but could drop again in the last few months of the year, when advertisers increased their spending.
"Budgets have already been set for October [but] I would not be surprised if, in November and December, we see a decline similar to that of the beginning of the year, in March and April, "said Hughes. I would not be surprised if the fourth quarter of this year is equal to the second quarter of this year. income term. "
In addition to these problems, the commitment and return on investment on Facebook have dropped significantly, according to the findings of C3 Metrics.
"It's the confirmation of what we've seen, namely that Facebook may not be the best playground for investing your advertising dollars – the return on investment is no longer what that he was, "said Hughes. "I think they'll try to sort this out [lawsuit] and get it out of the news cycle very, very quickly. "
Meanwhile, publishers blame Facebook for forcing them to rotate the video
A number of media representatives pointed out that the timing of the divergence was suspect. It's about the same time that publishers began broadcasting video for the platform a few years ago, at his request.
Phillip Picardi, former director of Teen Vogue and current editor of Out magazine, said in a tweet that there was a correlation between the measurement gap described in the lawsuit and the "pivot of the video" publishers, because of Facebook's ambition to push further video on the platform.
"This is particularly infuriating, because the" pivot of the video "is not, as evidenced, an initiative necessarily led by consumers," he tweeted. "It's more likely that this behavior is imposed by advertisers who prefer video ads to avoid ad blockers and ensure visibility."
Other media officials have tweeted that they were either not surprised by the news of the lawsuit, either by accusing Facebook and its reputation of reorganizing newsrooms and publishers' teams, resulting in layoffs throughout the sector.
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