Clients say Facebook knew it was providing inaccurate data for over a year before telling advertisers in 2016. They also say the problem was much worse than Facebook reported.
The lawsuit says the actual miscalculation for overestimated ad viewing by Facebook was 150 to 900%, not the 60 to 80% claimed by Facebook
In September 2016, Facebook admitted the that it overestimated video ad viewing time averages by up to 60 percent to 80 percent for two years because of a calculation error. According to the lawsuit, which a group of small social media agencies and marketing consultants initially filed in a California court October 2016, Facebook wasn’t sharing the whole picture.
The plaintiffs claim that Facebook inflated ad viewing time averages by 150 percent to 900 percent, much higher than reported.
The error affected a Facebook metric called “average duration of video viewed”, which was supposed to tell publishers for how long, on average, people had watched a video.
However, the metric did not include viewers who had watched for less than three seconds in the count.
Discounting the shorter views – including people who had ignored a video in their news feed – inflated the average viewing times for each video.
It was also criticised for counting a video as being viewed after three seconds.
When Facebook discovered the issue, it stalled fixing it for more than a year while it came up with a plan to make it seem like it wasn’t a big problem, the lawsuit says.
“But rather than correct the metrics immediately in January 2015 and tell advertisers, Facebook recognised that ‘a 40% drop will be too significant and might hurt user trust,’” the lawsuit claims.
Facebook, however, said it only learned of the issue in August 2016. They also say they fixed it before making the statement public the next month. Facebook also said it did not overcharge marketers.
In an emailed statement to CNBC, Facebook said the lawsuit is without merit and the company has filed a motion to dismiss the claims.
Facebook said, “Suggestions that we in any way tried to hide this issue from our partners are false. We told our customers about the error when we discovered it -and updated our help centre to explain the issue.”
The plaintiffs are requesting compensatory, punitive damages, legal fees and other relief, but did not disclose an amount.