Facebook’s failures could lead to ‘the fall of digital advertising’

One Facebook scandal after another has dented trust in not only the vanity metrics of campaigns on the social network, but also in digital advertising itself, argues Michael Spencer.

Facebook’s most recent lawsuit to do with inflated video metrics goes to the bone of the immorality of digital advertising today, which is mostly ruled by Facebook and Google.

In fact, Facebook is facing legal action from a small group of advertisers who claim the tech giant knew for more than a year that there were problems with the way it measured viewership of video ads – which, by the way, there have been rumours around of for years.

This is how it looks:

  • In September 2016, Facebook admitted inflating its average video viewing figures by only counting views that lasted longer than three seconds.
  • The skewed metrics did not relate to paid advertisements, but they could have misled brands into thinking that Facebook was a livelier video platform than it actually was.
  • The inflated video views led both advertisers and media companies to bet too much on Facebook video  –  which, if you haven’t, noticed never amounted to anything much (if you compare it to YouTube, for instance).

Facebook’s business model heavily relies on ads, as the majority of social network’s revenue comes from advertising. In 2017, about 98 percent of Facebook’s global revenue was generated from advertising.

It appears the social network allegedly thought it had to mislead to inflate the value of its stocks.

From a macro level, it really points to the dishonesty I think entwined with the world of advertising. While brands have often used Facebook for its targeting, the way it displayed warped metrics may have led brands to believe they were getting more return-on-investment from it than they really were.

The lawsuit alleges that Facebook has been cooking the books and not disclosing this miscalculation.

So what if it was all a lie? Facebook might have abused its position as a traffic hoarder (just as that same traffic now is going, among younger consumers, to YouTube).

The bottom line is Facebook knew about problems in how it measured viewership of video ads on its platform for more than a year before it disclosed them in 2016. Instead of being honest, it hid these things seemingly out of fear it would diminish profits and its reputation.

Well, guess what? The demise of trust in Facebook just continues all through 2018. We have to consider that this might be the fall of digital advertising as we know it. Before you can learn how to regulate artificial intelligence, you need to regulate algorithms for the good of humanity – and primarily this means regulating advertising.

What if advertising is a legacy industry that has no place in the future of a better internet? We entrusted Facebook to weed out misinformation, security breaches and data harvesting. Little did we realise Facebook’s ad-revenue appears to have systematically been based on manipulative deception of vanity metrics.

Michael Spencer is a marketing consultant based in Montreal, Canada. A version of this article first appeared here.


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