By some estimates, Facebook and its arch rival Google now account for upwards of 80% of every dollar spent on digital ads.
On Friday, David Fischer, Facebook’s VP of Business and Marketing Partnerships, acknowledged the existence of a “discrepancy” and explained…
About a month ago, we found an error in the way we calculate one of the video metrics on our dashboard – average duration of video viewed.
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). And so the miscalculation overstated this metric.
According to Fischer, this issue has been addressed, and he was clear to reassure marketers that “this miscalculation has not and will not going forward have an impact on billing or how media mix models value their Facebook video investments.”
Despite the fact that Facebook’s mistake didn’t have negative billing implications, there is no doubt that it looks bad for Facebook and has led some to question whether it will dent the social network’s relationship with marketers.
Not surprisingly, Facebook quickly found itself the subject of sharp criticism.
WPP CEO Sir Martin Sorrell used “Overstategate” to call on Facebook to provide its data for independent verification, and an unnamed Publicis executive reportedly told clients “two years of reporting inflated performance numbers is unacceptable” in a memo.
But as TechCrunch’s Josh Constine points out, some marketers have stepped up to defend Facebook, arguing that the mistake wasn’t all that consequential and suggesting that marketers are a fairly sophisticated bunch when it comes to keeping tabs on their social efforts.
@jasonwstein whole thing is silly. Full data by sec has always been available. We always look at 30 for comp 2 YT & 10 for Nielsen benchmark
— Azania Andrews (@jewelazania) September 23, 2016
Reasons marketers should care
Are those downplaying Facebook’s mistake justified in doing so, or is the concern legitimate?
Here are a few reasons why marketers should care about Overstategate.
1. Apparently, nobody noticed
Despite the fact that Facebook’s errant calculation of the Average Duration of Video Viewed may have overestimated this metric by a whopping 60% to 80%, it went unnoticed for two years.
Which begs the question: why, apparently, didn’t marketers notice?
Given the magnitude of Facebook’s miscalculation, one might have expected observant marketers to have caught on to major differences between the average durations reported on Facebook versus other platforms, unless other platforms perform significantly better than Facebook in this area, which seems unlikely.
Was nobody looking at this metric? Were marketers asleep at the wheel?
Did they not care as long as the metrics looked good and they kept getting budget? Did marketers fail to read the manual, as Kalev Leetaru argued? Or something else?
2. It’s not without potential consequence
Even though Facebook’s mistake didn’t have billing implications, as The Wall Street Journal notes, it could have made Facebook look like a more attractive channel and influenced spending decisions.
This is particularly true for less sophisticated marketers who rely on the vanity metrics Facebook highlights to them.
This in and of itself is cause for concern.
3. Facebook isn’t direct response only
Many marketers downplaying the Facebook error point out that metrics like Average Duration of Video Viewed are often not the primary metrics they focus on.
One told TechCrunch…
…most advertisers see reach and view time as secondary or even tertiary metrics.
When determining whether something is working, we typically focus on actions like clicks or conversions.
The problem with this is that not all marketers using Facebook are using it as a channel for direct response, so determining the efficacy of campaigns isn’t always as easy as drawing a straight line between dollars spent and clicks or conversions.
Video in particular is being widely used by major brands in social channels to drive brand awareness, so metrics like reach and Average Duration of Video Viewed are far more important than some seem to believe.
Other miscalculations could be lurking
The biggest reason that marketers should be concerned about Facebook’s faux pas is that they don’t know what other miscalculations could be lurking behind the metrics that they’re using.
Marketers “own” fewer and fewer of the channels and platforms they rely on, and rarely have access to the raw data that goes into the metrics third parties report to them.
Furthermore, in many cases, their efforts on third-party services are aimed at driving engagement on those third-party services, as opposed to driving action on properties they own, so it’s increasingly difficult to close the loop.
While programs like Facebook’s ad viewability verification help, not all marketers work for companies that have the resources to take advantage of these, and clearly those that do don’t feel that they should be paying extra for them.
That means large numbers of marketers, particularly those working for SMBs, are looking at and in many cases making important decisions based on metrics that come out of black boxes.
Black boxes that may very well not be working properly 100% of the time.
That, no matter what, is a big problem.