Three Thoughts on Facebook’s Video “Watch Time” Issue

October 3, 2016

By AARM | Advertising Audit & Risk Management, Marketing Math Blog

From an advertiser's perspective, there were three things that stood out in the wake of Facebook's recent disclosure that it had mistakenly overstated average video watch times.

First and foremost, the miscalculation was not uncovered by the advertising agency community. Given the dollar volume being committed to Facebook, whose digital ad revenues will eclipse $6.0 billion, it would be fair to assume that ad agencies had a fiduciary duty to verify/investigate Facebook's performance monitoring methodologies prior to investing their clients' media dollars. The fact that Facebook had not embraced industry standards and asked the Media Rating Council (MRC) to accredit its performance metrics should have been the hot topic of conversation prior to Facebook's disclosure, rather than after the fact. Ironically, in the wake of this disclosure, WPP stated that the mistake "further emphasizes the importance and need for third-party verification of all media — not only to verify trading terms but also to verify performance." So if agencies truly felt this way, why wasn't this standard not being applied here-to-for?

Quite simply, the issue is that self-reported performance metrics are unequivocally no substitute for independently audited outputs.

Secondly, it would appear as though the agency community is somewhat fearful of Facebook. Too many agency executives spoke to the trade media on the basis of anonymity rather than overtly stating their personal and or their company's perspective on both the inflation of the viewing time metric and the need for accreditation. This seems an odd dynamic given the percentage of digital media spend represented by the "Big 4" agency holding companies. Advertisers might rightly expect that the scale of these entities would offer them some level of leverage and protection when interacting with media sellers. This is apparently not the case.

Thirdly, advertisers need to put a stake in the ground when it comes to media transparency and performance authentication. Self-reported performance indicators, such as Facebook's average video watch time, cannot be the basis upon which they invest their media dollars. If a media seller has not had its delivery and performance metrics audited and accredited by an industry accepted resource such as the MRC, IAS, Nielsen or comScore for example, then they should be excluded from the media investment consideration equation.

The Association of National Advertisers (ANA) CEO, Bob Liodice appropriately addressed this issue when the ANA issued the following statement: "ANA does not believe there are any pragmatic reasons that a media company should not abide by the standards of accreditation and auditing" calling this important step "table stakes" for digital advertising.

The issue with the misstatement of the video ad watch times is not whether or to what extent the :03 second watch time threshold was utilized by ad agencies to assess Facebook's performance. Quite simply, the issue is that self-reported performance metrics are unequivocally no substitute for independently audited outputs.

For anyone to suggest that the miscalculation is really no big deal, because it is a metric that is not utilized when considering the purchase of video advertising on Facebook, is misguided. The lack of transparency, further compounded by the media seller's lack of adherence to industry standards when coupled with the self-reported inflated viewing times can and did wrongly influence agency and advertiser decisions. Thus, raising the all-important question: "Absent an independent audit, what portion of Facebook's self-reported performance metrics can an advertiser trust?"

Source

"Three Thoughts on Facebook's Video 'Watch Time' Issue" AARM; originally published on marketingmath.aarmusa.com, October 2016.

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