Facebook miscalculated advertising metrics – should businesses now ditch video ads? – StartupSmart
The revelation that Facebook miscalculated key advertising metrics for two years has irritated advertisers worldwide, and businesses are advised not to rely on analytics when making marketing decisions.
The social media giant notified advertisers through its “Advertiser Help Centre” that a metric used for determining the time spent by users watching videos was incorrect, as the Wall Street Journal reported last week.
Ad agency Publicis Media was told by Facebook that metrics were overestimated by up to 80%. The agency spent over $77 billion on ads in 2015 alone.
On Friday, in an apology by Facebook’s vice president of business and marketing partnerships, David Fischer, he revealed it was a “mistake” and a “miscalculation”.
“The metric should have reflected the total time spent watching a video divided by the total number of people who played the video. But it didn’t – it reflected the total time spent watching a video divided by only the number of “views” of a video (that is, when the video was watched for three or more seconds),” Fischer said in a post to Facebook.
This means a video watched by 40 people for a total of 900 seconds (15 minutes) should have been listed as watched for an average time of 22.5 seconds. Instead, Facebook was only counting users who had watched the video for three or more seconds.
In a similar scenario, if half of users who watched the video (20 in the above example) did so for over three seconds, then the average time spent watching would jump to 45 seconds.
Advertisers and agencies, thinking users were engaged for nearly a minute on their videos, may have spent more on video advertising, and more investment in the medium altogether.
This may also have affected media companies, which could have become more video-focused on the direction of their advertisers.
This news is particularly noteworthy given that Facebook predicted the network would be “probably all video” in five years.
The company has been actively cutting most forms of text-based communications, removing messaging from the Facebook app, and forcing users to install the separate “Messenger” app instead.
At the time, vice president of Facebook’s European, Middle Eastern and African operations, Nicola Mendelsohn, said the change was driven by numbers and was an organic shift.
In a letter to its clients about the video metrics, Publicis Media said, “Two years of reporting inflated performance numbers is unacceptable”.
“[This issue] once again illuminates the absolute need to have 3rd party tagging and verification on Facebook’s platform.”
Social media and advertising expert Catriona Pollard agrees, telling SmartCompany “there needs to be third party analytics verification”.
“Advertisers rely on companies like Facebook and Google for analytics, and often there is no way of verifying,” Pollard says.
“We’re talking about billions of dollars being spent based on Facebook’s analytics, it’s a really big deal.”
Don’t rely on analytics
Faced with this revelation, SMEs could be thinking that video advertising might not be the way to go. Pollard disagrees, saying businesses should just continue with “what’s best for your brand”.
However, businesses should resist relying entirely on analytics.
“What this tells us is to not just use video because Facebook or Google’s analytics tell you, don’t make all your decisions based off analytics,” Pollard says.
“Ultimately it comes down to what medium and creative works best for your brand, and what works for you best across all platforms. We’ve become very reliant on analytics opposed to the traditional feedback of focus groups and research.”
Pollard advises businesses to revisit their advertising on Facebook in light of this news, and make decisions based “on what is actually working”.
She also suggests doing some testing outside of Facebook, such as on Twitter or YouTube, to see what works.
“For small businesses, the first question to ask is ‘what do I want to get out of this?’ and ‘what audiences do I want to reach?’” Pollard says.
“I think a lot of SMEs get caught up in the “big idea” when it comes to video, and they spend thousands. It’s best to keep an open mind, video is powerful but so is a really strong static campaign.”
Facebook has since fixed the discrepancy, with Fischer saying, “We informed our partners and made sure to put a notice in the product itself so that anyone who went into their dashboard could understand our error. We have also reviewed our other video metrics on the dashboard and have found that this has no impact on video numbers we have shared in the past”.
“While this is only one of the many metrics marketers look at, we take any mistake seriously.”
SmartCompany contacted Facebook this morning but did not receive a reply prior to publication.
This article was first published on SmartCompany.
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