Facebook Aims for More Transparency With Video Ad Data

Two months after Facebook Inc. admitted it had inflated the average time it told advertisers that users were watching their video ads, the company is promising better data to give ad buyers a clearer picture of how they are spending their money.

The world's biggest online social network on Wednesday launched a new blog on its website called Metrics FYI, where it will share updates and corrections for its data.

“We want to ensure our clients trust and believe in the metrics that we are providing,” Carolyn Everson, Facebook's vice president of global market solutions told Reuters.

Getting advertisers to buy more video ads is key to Facebook’s continued revenue growth, as they fetch higher rates from advertisers than text or photo-based ads.

Facebook, along with Alphabet Inc.'s Google and other large digital companies, has been criticized for a lack of transparency in how it measures the performance of videos.

Particularly, the lack of a universally agreed method of calculating how much time people are watching online video has been a sore spot for advertisers.

Shares of Facebook were down 2.5 percent at $114.30 in premarket trading on the New York Stock Exchange.

In September, Facebook told advertisers that the average time users spent viewing online ads was artificially inflated, because it was only counting videos that were watched for at least three seconds, its benchmark for a “view.”

Facebook left out those who watched for less than three seconds, or who did not watch the video at all, which gave advertisers the impression their videos were performing better than they really were.

Since the admission and ensuing criticism from advertisers, Everson said Facebook has been in contact with clients and ad community trade groups, including the Interactive Advertising Bureau and the Association of National Advertisers (ANA).

Facebook also said on Wednesday it is in the process of forming what it called a "Measurement Council," which will include measurement experts from clients and ad agencies.

One of Facebook's prominent advertisers, Swiss food and drink company Nestle SA, is already on board, Everson said, and the council should be up and running by early 2017.

The ANA, which represents Procter & Gable Co., AT&T Inc. and other major advertisers, has called on Facebook to get its metrics accredited by the Media Rating Council (MRC), an independent media measurement audit group.

While Facebook’s internal metrics are not accredited by that group, it does use MRC-accredited third-party vendors, such as Nielsen and comScore, to help advertisers verify certain data.

(Reporting by Tim Baysinger; Editing by Bill Rigby and Bill Trott)