What Facebook's miscalculated metrics mean for marketers

Facebook again admitted that it provided inaccurate metrics to its advertising and publishing partners, but the company also promised a number of fixes to the problem.

For the second time in as many months, Facebook admitted it misreported the metrics it provides to publishers and marketers to measure reach and engagement on their posts. The world's largest social network again blamed "bugs" for the discrepancies that resulted in undercounting or over-reporting of metrics related to marketers' posts and video views, as well as the time spent on publishers' Instant Articles. In late September, Facebook told its marketer customers that it had over-reported video metrics for two years.

Facebook said the new errors do not impact billing, and it has implemented new measures, including independent review and third-party verification, to allay concerns among the company's more than 3 million advertisers and publishers.

Marketers lack leverage to pressure Facebook

The latest revelations likely weigh on the confidence of Facebook's publishing and marketing partners, but they don't have much leverage to pressure Facebook, according to Jenny Sussin, research director at Gartner. "This may give them more negotiating room with any Facebook enterprise contracts for ads, but when the network itself is so valuable it's not like people can leave and go somewhere else," she says.

Jessica Liu, senior analyst at Forrester Research, expects these problems to continue, and the company's perceived value among marketers will diminish as a result of metrics snafus, she says. "Marketers believed that Facebook was effective but now, because calculations are misaligned, marketers aren't sure of Facebook's value and regress to operating in a social media black box circa 2010."

Facebook will lose marketers' trust as it admits to more of these issues but, and Facebook will have to assume more responsibility as it grows ever larger in reach and influence, according to Liu. "To regain trust, Facebook must incorporate data transparency and governance."

Facebook promises third-party verification of metrics

Facebook said it will provide new data for display ads from third-party measurement firms, such as Moat and Integral Ad Science. The company also plans to partner with Nielsen to quantify on-demand and live-video views. Finally, Facebook said it plans to organize a "measurement council" of outside marketers and advertising executives to provide more frequent updates about the accuracy of its measurement systems.

Marketers have every right to feel disillusioned about Facebook's lack of transparency, despite its effectiveness in connecting brands with customers, but those marketers are also to blame, according to Liu. They shouldn't have taken Facebook's metrics at face value, Liu says, and she criticizes the ad industry for following Facebook's nonstandard framework for metrics. "Marketers must do a better job of asking fundamental questions about their metrics," Liu says. "Basic accuracy questions will create clarity and engender confidence."

The entire ad industry is culpable for measuring "superficial metrics" for years, as well. according to Gartner's Sussin. "As we've always said, volume is nice but actually getting a customer to your site, filling out a lead form or making a purchase" are the outcomes companies should be tracking, she says. "Facebook insights can get you part of the way, but if that was all you were ever measuring the odds are you didn't know what the real impact of your social strategy was anyway."

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