An online marketing agency is suing Facebook, claiming it knowingly lied for over a year about its average video ad time stats and further lied about the extent of its miscalculations. The marketing agency Crowd Sirens has also included a fraud claim and is seeking punitive damages according to an amended complaint it refiled earlier this week.
The original suit was in regards to the way Facebook had been reporting its average video ad viewing times. An investigation uncovered that the company had only been counting video views longer than three seconds long in its calculations. Because it was not including any views under three seconds, it had the effect of inflating the average length of a view in its "average duration of video viewed" metrics.
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When this was uncovered in 2016, Facebook claimed it had only recently discovered the error and told advertisers that it had merely overestimated the average viewing duration by around 60%-80%.
However, after the review of more than 80,000 court released internal Facebook records, Crowd Siren is not only alleging that Facebook knew about this calculation error as far back as early 2015, but that it also lied about its average viewership overestimations, with the number actually closer to 900%.
Facebook denies all these claims and has moved to dismiss the recently added fraud claims. The tech giant has since released a statement saying, "suggestions that we in any way tried to hide this issue from our partners are false." It has always been in Facebook's interest to keep advertisers happy and they have previously allowed independent verification of its metrics to appease its critics.
However, if this lawsuit is true, it means that the other advertisers who had voiced their suspicions regarding the video metric calculations directly to Facebook mid-2015 were lied to. Facebook has lost more than 30% of its value in the last four months and If the court affirms this latest claim, it will only hurt the company's reputation further.