Photographer: Chris Ratcliffe/Bloomberg

Facebook Finds More Ad-Metric Errors, Vows Clarity About Fixes

Facebook Inc. said it discovered several mistakes in its reporting of metrics to partners and advertisers and vowed to be more transparent about errors in the future as it fixes the issue.

The social-networking company conducted a broad review after discovering three months ago that it had overstated how long people watched videos on its site. The miscalculation wasn't broadly disclosed, sparking some criticism of the social network. Now, Facebook says it has found four other instances where it miscalculated reach on its site, including overstating how long people spent reading Instant Articles and how many people interacted with businesses' Facebook Pages.

Companies and marketers rely on Facebook to tell them how well the content they post is performing, so that they can make strategic decisions about what to do next and how much to invest through advertising or otherwise. To avoid future errors, the company said it's establishing a measurement council made up of top advertisers and partners. Facebook will also allow more third party measurement companies such as Nielsen to track and supplement its metrics. Additionally, Facebook is revising the descriptions for its data to explain exactly what they measure, for example reporting "3-second video views" instead of just "video views."

"We are very much striving to be known as a listening organization," Carolyn Everson, Facebook's vice president of global marketing solutions, said in an interview. "We hope to learn every single day about how we can improve the way we service our clients."

Facebook makes more than 220 metrics available to clients, according to Everson. Among the troublesome numbers was one called "referrals" that was meant to show app makers how many of their posts directed traffic back to their website or app. Instead, Facebook's metric counted all the traffic that came out of the posts, even those that kept the viewer within Facebook. As a result, referrals were overstated by 6 percent on average, Facebook said.

Facebook shares slipped 1.6 percent to $115.29 at 9:52 a.m. in New York. They are up 12 percent this year through Tuesday, compared with a 6.7 percent increase in the Standard & Poor's 500 Index.

Sometimes Facebook's math formula was simply wrong. For Instant Articles, which publishers use to help their stories load faster, Facebook said it had accidentally overstated time spent on stories by 7 percent to 8 percent. It had been showing clients a number that was an average over time, instead of just dividing time spent on stories by their number of views.

For Facebook Pages, the company gave a number of how many people were reached, but double-counted repeat visitors. After Facebook fixes the problem, pages may see their 28-day reach drop by 55 percent, the company said.

Not all mistakes overstated Facebook's influence. After resolving one complication with video views, clients may see the metric for people who watched their whole video rise by 35 percent on average.

Facebook will disclose further updates on a new blog that's specifically dedicated to metrics news.  Facebook said none of the issues would affect client billing.

"We strive to be as accurate as possible," Everson said. "I can't sit here and tell you it's going to be perfect every day, because frankly, consumer behavior changes too quickly."

(Updates with stock trading in sixth paragraph.)
    Before it's here, it's on the Bloomberg Terminal. LEARN MORE