Facebook says it gave advertisers inflated video view metrics

[SAN FRANCISCO] Facebook Inc has been giving advertisers an inflated metric for the average time users spent watching a video, a measurement that may have helped boost marketer spending on one of Facebook's most popular ad products.

The company, owner of the world's largest social network, only counts a video as "viewed" if it has been seen for more than three seconds.

The metric it gave advertisers for their average video view time incorporated only the people who had watched the video long enough to count as a "view" in the first place, inflating the metric because it didn't count anyone who didn't watch, or watched for a shorter time.

Facebook's stock fell more than 1.5 per cent in extended trading after the miscalculation was earlier reported in The Wall Street Journal.

"This error has been fixed, it did not impact billing, and we have notified many of our partners both through our product dashboards and via sales and publisher outreach," Facebook said Thursday in a statement.

Facebook had disclosed the mistake in a posting on its advertiser help centre web page several weeks ago.

Big advertising buyers and marketers are upset about the inflated metric, and asked the company for more details, according to the report in the Journal, citing unidentified people familiar with the situation.

The Menlo Park, California-based company has kept revenue surging in part because of enthusiasm for its video ads, which advertisers compare in performance to those on Twitter, YouTube and around the web.

The metric has been renamed to make clearer what it measures, Facebook said.

The company's stock, which has jumped 24 per cent this year, rose less than one percent to US$130.08 at the close in New York.

BLOOMBERG