Advertisers in the US want to sue Facebook because of false information on the Video-use. The platform of the lives of ad money, now has a Problem with credibility with your customers.
Facebook, with, allegedly, around two billion users, the largest Social Network, is currently fighting on many fronts: Fake News, false accounts, data scandals, hacker attacks, conditions, allegations, and insecure user.
Now, advertisers put the pressure on those so the switch on the platform and thus the core business of the company.
In a class-action lawsuit in the US accusing Facebook of fraud. The company has shown the success of video advertising, deliberately and over a longer period of time greatly exaggerated in order to deceive advertisers.
Facebook got its advertising customers by the wrong Numbers believe “that the users have viewed the Videos, on average, longer than was actually the case”. So companies have been tempted to switch to more advertising and to pay excessive prices, stated in the writ.
Facebook has asked the district court for Northern California in Oakland to dismiss the case. 14. December will decide a judge about it.
Facebook apologizes
There is no dispute that Facebook is a serious mistake when measuring the success of Videos. The group itself had admitted that in August of 2016 to the public, after the Wall Street Journal had reported about it.
“About a month ago we have noticed an error in the way we calculate our Video metrics,” said Facebook at the time. “For the measure of total time watched a Video had to be divided by the total number of users who have seen the Video. But that was not the case.”
As a result, the average viewing time of Videos had been shown “by 60 to 80 percent” over the top. Facebook apologized and claimed to have the error corrected immediately.
What can you believe?
But the plaintiff company doubt. Facebook is not only the month, but “more than a year” from the wrong calculation, knew nothing, – stated in the writ. Overall, would have advertisers around two years of wrong Numbers.
In addition, internal documents of the group, in the framework of another procedure to the public that the Problem was far greater than admitted showed: “The figures for the average viewing time were not exaggerated, only 60 to 80 percent; they were exaggerated to 150 up to 900 percent,” says the statement of claim.
The case poses for Facebook to take some risks. Among the initiators of a class action, no heavyweight of the advertising industry is – but that could change, should connect the other to the lawsuit.
“Only the tip of the iceberg”
At stake is the trust of the customer and thus the business model of Facebook. In recent years, the company had advertisers, and Content producers urged to focus more on Video, because these are allegedly more successful than text or images.
Facebook earns its money almost exclusively with Ads. In the U.S., about a fifth of all Online advertising on Facebook. Thus, the group is behind Google (37 per cent) and significantly ahead of Amazon (4.1 percent), the analysis firm eMarketer.
When advertisers ask whether there is a notification in Facebook is at all useful, the company has a Problem. The same is true for platforms such as Google (with Youtube) or Amazon.
“Advertisers know that the Figures provided to them by these big platforms may not be valid,” says Kai Kuhlmann, a Director of the interests of the community in determining the distribution of advertising media (IVW). The false Facebook-Pay for the use of Video would have shown. “And I assume that this is just the tip of the iceberg,” says Kuhlmann to the DW.
The IVW-checked in Germany, the dissemination and use of Newspapers, magazines and Online media, and covers according to own 90 percent of the providers. Facebook and other major platforms to deny, however, is a collaboration with the IVW, a club that is supported by media companies, agencies and advertisers.
“Homework self-grade”
In the U.S., the industry calls for more transparency and an independent Review of the use of numbers. “We don’t want these platforms to grade your homework by himself,” said Bill Tucker of the Association of National Advertisers (ANA), a trade Association for the US advertising industry. “We have repeatedly called for a Review of the metrics by a third party and now see significant progress,” said Tucker to the DW.
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Facebook itself did not comment on the current class-action lawsuit against the DW, but that it “allows advertisers to manage their campaigns on Facebook by over 40 independent, third-party verified”. Basically, Facebook is counting “on providers to offer the highest possible global Services in order to avoid local island solutions”. As a German Partner, the company called GfK and Meetrics.
From the point of view of the German IVW that is not enough. The Facebook Partner to be “commercially operating service providers.” The “procedures for the verification, lie solely in the hands of the respective provider and are therefore not transparent.”
The IVW and similar organizations in 40 countries are no profits and are borne by the advertising industry, which has an interest in is as reliable as possible Numbers.
More transparency from Facebook also calls for the organization of media agencies (OMG). These service providers will advise companies where you switch on your advertising.
More pressure, more transparency?
“Facebook is aware of these claims and know that there is a Problem here”, says OMG managing Director Klaus-Peter Schulz. “It is not good for Facebook, if the associations of advertisers and global brands like Procter&Gamble, Nestlé or Unilever speak negatively about Facebook. It does no one any good.”
However, not all parts of the customer’s advertising, criticism of Facebook, says Schulz. Companies that want to improve by advertising its Image, be interested in figures as accurate as possible Use. It’s different for Online retailers such as Zalando. “The know exactly how many units they sell this and are interested only on the edge for the range of numbers,” he said to the DW.
However, Schulz believes that the growing pressure on Facebook could force the other to give in. “I think that will open Facebook in the German market within the next year much stronger.”
Kai Kuhlmann of the IVW is not quite so optimistic. An Opening should happen “in the next three to four years, otherwise it makes no sense”. Because the longer the major platforms to deny an independent audit, the more existing structures such as the IVW would be weakened.
Advertisers should therefore build pressure and will not make, “that they are no longer willing to accept the Numbers from Facebook, as the basis of business relationships unaudited,” says Kuhlmann. A class action lawsuit in the United States was therefore a step in the right direction.