The pivot to video was based on a lie, lawsuit alleges

A closer look at the numbers.
A closer look at the numbers.
Image: Reuters/Dado Ruvic
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The media industry started feverishly spending on digital video content several years ago, based on the premise it was what users wanted—and could generate much-needed revenue for news organizations. Soon after, however, the “pivot to video” became a “bloodbath,” as headlines put it. Hundreds of staffers were laid off after video’s promised return on investment—especially on social platforms—did not live up to reality.

A 2016 lawsuit filed by a group of advertisers alleged that Facebook, one of the motors of the pivot, inflated a metric that measured how long users viewed video ads, pushing advertisers to buy more and more of them. The lawsuit was amended yesterday (Oct. 16)  to charge that Facebook also knew about the errors it made in its calculations long before it disclosed it to advertisers—and that viewership metrics were inflated far beyond what was previously reported.  The amended complaint was first reported by the Wall Street Journal.

In the lawsuit, the advertisers say “Facebook’s action rises to the level of fraud and may warrant punitive damages.” Instead of discovering the mistake a month before the company made it public, as Facebook and its executives said in statements at the time, Facebook engineers had known about it for more than a year (since January 2015), the lawsuit says, citing internal Facebook documents obtained in court proceedings. Advertisers had been reporting suspicious results such as the “average % of video viewed” reaching 100%. “Yet Facebook did nothing to stop its dissemination of false metrics,” the suit says.

In 2016, the Wall Street Journal reported that the average times users spent watching video ads were inflated by 60% to 80%. Facebook itself disclosed the error several weeks prior in a post in a help center for advertisers.

For two years, Facebook had been only counting video views that were longer than three seconds, ignoring anything shorter, which resulted in the inflated figures. The amended complaint alleged that metrics were actually inflated much more—by 150% to 900%—again citing Facebook records. Here’s what the complaint describes as the result:

Facebook’s misrepresentations induced video advertising purchasers, including Plaintiffs, to continue purchasing video advertisements, and to purchase additional video advertisements, because purchasers believed that users were watching their videos, on average, for longer than users were actually watching their videos.

Advertisers, the lawsuit says, were induced to “pay more for Facebook video advertising than they otherwise would have been willing to pay.”

Facebook was not immediately available for comment. The advertising industry has called for independent verification of Facebook’s metrics, following the initial 2016 reports of the inflated figures.

Meanwhile, media Twitter lamented the victims of the “pivot to video”