Facebook Video Ad Metric Lawsuit Prompts Publishers to Revisit the ‘Pivot to Video’

Some in the industry say faulty numbers contributed to over-investment

A new court filing shows Facebook was inflating metrics by up to 900 percent. Getty Images
Headshot of Kelsey Sutton

New information in an updated court filing against Facebook has prompted publishers to reconsider the extent of the miscalculation they made when reallocating resources to video teams in an effort to capitalize on the potential of social video.

The unredacted court filings, part of an ongoing class-action lawsuit a group of advertisers brought against Facebook for erroneous video ad metrics, included allegations that Facebook knew its average watch-time metrics on paid video advertising on the platform were being incorrectly reported for longer than a year and that the extent of the inflation of those metrics was much bigger than originally reported. The plaintiffs claimed the metrics, which were first reported to be off by 60 to 80 percent, were actually erroneously inflating metrics by up to 900 percent.

Facebook has denied the claims of fraud and is seeking to get the charge dismissed.

The information prompted a wave of conversation in the publishing industry about the extent to which the metrics, which Facebook first acknowledged were being miscalculated in 2016, influenced publishers’ decisions to throw resources behind social video efforts, often at the cost of their newsrooms.

In a Wall Street Journal article, some journalists and media said the video ad metrics at the center of the ongoing suit were not taken into consideration when publishers moved resources to social video. Rameez Tase, who this reporter worked with while employed at the digital media outlet Mic in 2017, told the Journal it was “categorically false” that publishers decided to allocate resources to video based on the erroneous time-spent video metric. (Tase now works at Axios as vice president of audience development and insights.)

Some in the publishing industry, though, are taking a broader view. Josh Marshall, editor and publisher of the progressive news site Talking Points Memo, said that while the erroneous metrics might not have been the only reason publishers pivoted, he thought it played a role in a bigger misrepresentation on Facebook’s part about the prospects of investing in social video.

“Publications did not pivot to video just because of this one metric,” Marshall said. “But if people think that Facebook video and the very dubious metrics that were behind it didn’t have a big impact on how this all played out, they’re fooling themselves.”

Jason Kint, president and CEO of the digital media trade publication Digital Content Next, pointed to a panel during which Nicola Mendelsohn, Facebook’s vice president for Europe, the Middle East and Africa, said the future of the social media platform would “probably be all video.”

“You’ll see the argument from the platform that advertisers buy based on a CPM, so time with video doesn’t necessarily matter,” Kint said. “But clearly, if you’re in the business of buying video, you care about the amount of time [viewers] spent with that video. And if you’re Facebook and you’re trying to shift money away from television and YouTube, this metric becomes important in terms of pitching your product.”

Digital publishers have been in a tough spot for years as platforms like Facebook and Google have gobbled up digital ad dollars while newcomers to the digital media space are crowding the marketplace. A number of companies, including Mic, Mashable, Vocativ, MTV News, Fox Sports and Vice, laid off journalists and others to free up resources for social video operations. Still, more publications, including Vox Media, have since laid off journalists working on social video after those prospects didn’t pan out as anticipated. Other companies, like LittleThings and Upworthy, experienced more dramatic effects of their reliance on Facebook to distribute their content. (LittleThings shut its doors entirely before being revived under a new owner, and Upworthy laid off its entire editorial team in August.)

Marshall said he believed an industry-wide perception that Facebook had cracked the code of online video influenced the decision to allocate resources to video with the expectation that it would be a big business win. People have known about the erroneous metrics for years, Marshall said, but it’s the new allegations that have prompted Marshall to reconsider the forces behind the calculation.

“The suggestion now that something that might be fraud had a big part of that puts it in a new light,” Marshall said.

Raju Narisetti, a longtime media executive and former CEO of Gizmodo Group, said news organizations erred in their estimations of how big an audience they could reach in the ill-fated “pivot.” News organizations “are as much to blame” as the platforms, he said

“It is less about specific (even if erroneous or inflated in hindsight) data, but more about jumping in feet-first into every new feature or proposition that Facebook and for a while YouTube and Twitter dangled in front of increasingly desperate newsrooms and news publishers,” said Narisetti, who is now a professor of journalism at Columbia University. “And the funding model of these pivoting newsrooms, which overindexed for audience growth and not for building a unique and core journalism proposition, also made it easy to fall for these false promises.”

Marshall said it would be hard to quantify how much the faulty metrics affected publishers’ decisions to invest in social video. Kint, who supported the release of the unredacted court filings in the lawsuit, said the idea that even a single job may have been lost to the faulty metrics was hard to stomach.

“If as much as a single journalist’s job was impacted by chasing false and maybe knowingly inflated metrics by Facebook, that makes me angry,” Kint said. “And in the case of entire newsroom, an entire media company, it makes me furious.”

@kelseymsutton kelsey.sutton@adweek.com Kelsey Sutton is the streaming editor at Adweek, where she covers the business of streaming television.