In 2016, Facebook admitted to miscalculating to advertisers the average time that users were watching videos on the website. At the time, petitioners filed a lawsuit in California courts, and this week, after reviewing 80,000 pages of internal Facebook records, they have added a complaint arguing that the company knew about the error more than a year before it became public and that the error is far more egregious than previously known. Facebook has denied the allegations.
Facebook has made video central to its growth for years, convincing advertisers and media organizations alike that they should redirect investment to video content. More than 95 percent of Facebook’s revenue comes from advertising — over $17 billion, according to the lawsuit.
Large technology companies are aggressively pushing video momentum in India. Excluding China, more than 60 percent of all Asia Pacific online video revenue will be from Facebook, Amazon, Netflix, and Google by the end of this year, Media Partners Asia reports. Over the last year, India saw a larger video content expenditure than Southeast Asia’s biggest markets and Korea, according to the research firm.
These companies, along with Hotstar, Reliance Jio, and the like, are betting that increased cheaper connectivity for a largely illiterate population will leapfrog text for video. As these companies still mold their approaches to a price sensitive market and compete for streaming rights and exclusive content, their monetization strategy relies on accurate data about how and when Indians pause over a video clip.
In 2016, the number that Facebook claimed that they calculated was the total time users spent watching a video divided by the total number of people who played the video. Instead, the company had divided the time by only the number of “views.” Views are only when a video is watched for three seconds or more, not any time the video is played.
The average duration of video views is a key metric for advertisers to assess the market, according to the lawsuit.
Facebook said that this metric likely overestimated average video watching by 60 to 80 per cent, and acknowledged that marketers had been misinformed about the video advertising they were buying from Facebook from 2014 to 2016. At the time, Facebook claimed that they informed their partners as soon as they discovered the error. In addition, the platform stated that, after it told clients of the error, the clients responded that they were not concerned.