Will Facebook’s Video Metric Miscalculation Hurt Its Bottom Line?

Several weeks ago, Facebook Inc FB posted on its “Advertiser Help Center” that the company has repeatedly miscalculated a key advertising metric called “Average Duration of Video Viewed.”

According to the Wall Street Journal, Facebook’s calculations didn’t include any video views that lasted less than three seconds. As a result, the average video engagement time Facebook reported to advertisers may have been inflated by as much as 80 percent.

Why Does This Metric Matter?

Last quarter, Facebook reported $2 billion in quarterly profit. Almost all of that profit came from advertising. In Q2, the company also reported its price per ad was up 9 percent.

Advertisers pay Facebook based on the exposure they believe their ads are getting on Facebook’s platform. The overestimated video metric may have driven advertisers to pay a higher price than they otherwise would have. In addition, the inflated metric may have helped convince…

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