Facebook Inc.FB-1.63% on Friday apologized for overestimating a key video metric for two years, a miscalculation that irked advertisers and media companies that have poured resources into video efforts on the social network.
In a Facebook post, David Fischer, vice president of business and marketing partnerships, described in greater detail how the company discovered about a month ago the error in calculating the average time users spent watching videos.
“The metric should have reflected the total time spent watching a video divided by the total number of people who played the video. But it didn’t – it reflected the total time spent watching a video divided by only the number of ‘views’ of a video (that is, when the video was watched for three or more seconds),” Mr. Fischer wrote. “And so the miscalculation overstated this metric. While this is only one of the many metrics marketers look at, we take any mistake seriously.”
The Wall Street Journal reported Thursday that ad buying agency Publicis Media was told by Facebook that the earlier method likely overstated the metric by between 60% and 80%. That discrepancy means that marketers could have misconstrued the performance of video ads, affecting their decision making when it comes to spending money on Facebook versus competitors like YouTube, Twitter or even television.
“We want our clients to know that this miscalculation has not and will not going forward have an impact on billing or how media mix models value their Facebook video investments,” Mr. Fischer wrote.
Mr. Fischer said that Facebook noticed the discrepancy about a month ago, fixed it and notified its partners. He also said that the miscounting did not impact other figures, like number of video views. “We sincerely apologize for the issues this has created for our clients,” Mr. Fischer wrote.
Facebook stock was down 1.7% on Friday morning.
The error has stoked fears, long percolating in the media industry, about the “walled gardens” that publishers and advertisers believe tech giants like Facebook and Google operate. Facebook allows only limited access to third-party measurement specialists to plug into their systems.
“We know we can’t have true partnerships with our clients unless we are upfront and honest with them, including when we make mistakes like this one. Our clients’ trust and belief in our metrics is essential to us and we have to earn that trust,” Mr. Fischer wrote.
“That is why we also give marketers choice by offering third-party video verification options with companies like Nielsen and Moat. We want marketers to measure video with us in the way they feel most comfortable,” he wrote.
A letter Publicis Media sent to clients, reviewed by The Wall Street Journal, said the metric issue “once again illuminates the absolute need to have 3rd party tagging and verification on Facebook’s platform. Two years of reporting inflated performance numbers is unacceptable.”
Write to Steven Perlberg at steven.perlberg@wsj.com