The WiR: Facebook Under Fire for Video Metric Inflation, Ad Exchanges Pledge to Clean Up Programmatic Trading, and UK PSBs Call for Government Protection

In this week’s Week in Review: Advertisers allege that Facebook withheld information on its over-reporting of video metrics for a year, six ad exchanges team up to lay out principles for programmatic trading, and UK public service broadcasters call on the government to protect their prominence. To receive an update on the industry’s top stories every Friday, sign up to the weekly Video Round-Up.

Top Stories

Facebook Kept Video Metric Overestimates Secret for Over a Year claim Advertisers
Advertisers filing a lawsuit against Facebook over inflated video viewing metrics have alleged that the social media platform knew about problems with how it measured viewership for over a year before finally disclosing the error.  Facebook revealed in 2016 that it had made an error in measuring the average view duration for videos on its platform by only counting views which lasted over three seconds, thereby artificially inflating the state. Facebook said it disclosed the error as soon as it was discovered, and that it probably overestimated average time spent watching videos by 60 to 80 percent.

This week however, a number of small advertisers involved in a lawsuit resulting from the incident disputed both these claims. They say that Facebook knew about the error since January 2015, and that it overestimated average time spent watching videos by between 150 and 900 percent. Facebook has described the case as “without merit”.

The Guardian Settles Legal Dispute with The Rubicon Project
The Guardian has now settled its legal dispute with The Rubicon Project over the ad tech vendor allegedly charging hidden fees to advertisers, the Wall Street Journal reported this week. The Guardian filed a lawsuit against Rubicon in March last year, claiming that hidden fees charged by the Rubicon Project constituted a breach of contract. The Rubicon Project then filed a counter-suit in May, denying the Guardian’s claims and saying the Guardian had harmed its business through its own practices. The pair however have now reached a financial settlement, which does not assign liability to either party, according to Rubicon Project CEO Michael Barrett.

UK PSBs Seek Government Protection from Tech Threat
UK public service broadcasters (PSBs) this week penned an open letter asking  the government  to guarantee the prominence of their linear services and associated on-demand services. The heads of ITV, the BBC, Channel 4, Viacom UK, STV and S4C said that PSBs play a vital role in providing trusted news and shaping UK culture, but that global tech players are becoming “gatekeepers” of what audiences watch, and promoting their own and their partners’ content at the expense of PSBs. The letter’s signatories asked that the government would revise and modernise its rules on prominence, as media regulator Ofcom runs a review on the existing rules.

The Week in Tech

Ooyala Bought Out by Management
Video distribution business Ooyala announced today that its management has completed a buyout of the company from previous owner Australian telecoms company Telstra. After a disappointing few years under following Telstra’s buyout, Ooyala’s management team believes they will fare better under a new owner, with CEO Jonathan Huberman saying his team is “actively exploring acquisition opportunities to further accelerate Ooyala’s growth”. Read the full story on VAN.

Ad Exchanges Band Together to Clean Up Programmatic Trading
Six top ad exchanges this week released a joint statement outlining core principles for programmatic trading which they promise to adhere to, in an effort to introduce more transparency to programmatic auctions. The CEOs of OpenX, Rubicon Project, SpotX, PubMatic, Telaria and Sovrn all agreed to a number of specific actions based around the principles of efficiency, transparency and a fair market, in part as a response to recent concerns around auction gaming. The Trustworthy Accountability Group (TAG) has been bought in to create a new compliance and accountability certification based around these principles.

“Together, we are committed to unleashing the full potential of programmatic advertising. Advertisers, publishers, and their representatives need and deserve transparent marketplace principles, which clearly explain how the market operates, reduce friction, ensure quality, and increase value for buyers and sellers,” the letter said.

Sorenson Media Files for Chapter 11 Protection
Advanced TV specialists Sorenson Media filed for chapter 11 protection this week, according to the Wall Street Journal’s CMO Today. While Sorenson has recently announced new partnerships with AMC and Sinclair Broadcast Group, there have been hints of trouble from the apparent collapse of the company’s deal with ITV to create an addressable TV advertising solution.

“While broad market adoption and technical implementation has taken longer than anticipated, the company is committed to seeing its vision for addressable advertising realized,” Sorenson told the WSJ. “The company expects that operations will continue uninterrupted,” it said

DataXu Explores $300 Million Sale
Ad tech company DataXu is reportedly seeking a $300 million sale, and has taken on investment bank GCA Advisors to oversee the process, according to the WSJ. DataXu is one of the few remaining large independent demand-side platform (DSP) operators, and has raised $87.5 million in funding since its founding back in 2009. Neither DataXu nor GCA confirmed the reports.

Facebook Shareholders Back Proposal to Out Zuckerberg as Chairman
Several public funds holding shares in Facebook are backing a shareholder proposal filed by Trillium Asset Management to remove CEO and founder Mark Zuckerberg as chairman of the board, according to a Wall Street Journal report. While the proposal is somewhat futile given Zuckerberg reportedly holding 59.9 percent of voting power among Facebook investors, support for the proposal is significant in demonstrating falling trust in Zuckerberg’s ability to lead the company, following a number of scandals over the past few years.

TVSquared Launches ADeffect Product
TV measurement company TVSquared announced this week it has added ADeffect, which it says will model the longer-term effect of TV campaigns, to its ADvantage platform. “Traditionally, advertisers had to build and maintain time-intensive, expensive models to understand the true ROI of TV,” said CEO and co-founder Calum Smeaton. “We designed ADeffect to eliminate this reliance altogether. Taking into account Adstock and seasonality, ADeffect models the indirect, extended impact of advertising. Marketers now have an easy, fast way to get the results they need, when they need them – not months after the fact.”

Lotame Launches Lotame Strategic Services in EMEA
Lotame, a data solutions company, on Thursday announced the launch of Lotame Strategic Services (LSS) in EMEA. Under the new offering, Lotame says it can now support clients with the development and execution of their data strategy as part of a hands-on managed service. “Providing clients with direct access to the resources, experience and technology needed to drive success in their data strategies has always been a priority for Lotame,” said Andy Monfried, CEO & founder of Lotame. “We’ve launched a brand-new way to work with Lotame — as a managed service that supports EMEA businesses from data strategy development to execution and beyond.”

The Week in TV

Netflix Adds Seven Million Subscribers in Strong Q3
Netflix recorded a strong quarter in its latest financial results, adding nearly seven million new subscribers to its service, bringing total subscriptions up to 137 million. This beat Wall Street expectations of around 5.07 million new subscribers, and saw share prices soar over nine-percent in the aftermath (though they have since returned to roughly the pre-results price). “Our broad slate of original programming helped drive a solid quarter of growth with streaming revenue increasing 36 per cent year over year and global membership surpassing 130 million paid and 137 million total,” the company said in a statement. “We’re thrilled to be growing internet entertainment across the globe.”

Google and Sky Join HbbTV Association
The HbbTV Association this week announced that seven new companies including Google, Sky and RAI have joined the industry body, which seeks to provide an open standard for the delivery of broadcast and broadband services through connected TVs and set-top boxes. “We are excited about these high-profile companies joining HbbTV Association. The continuing strong interest by major market players in our open specifications confirms our approach towards establishing HbbTV as a universal standard for hybrid broadcast and broadband services across all screens,” said Vincent Grivet, chair of the HbbTV Association.

ITV Plans SVOD Service Launch for 2019
ITV released fresh information about its plans for its upcoming subscription video on-demand (SVOD) service, with CEO Carolyn McCall telling MIPCOM the service will be launched next year. McCall said the service will be separate from ITV’s existing digital streaming platform ITV Hub, and will be aimed specifically at the UK market.

The Week in Publishing

LADbible Acquires Unilad
LADbible confirmed this week it has acquired Bentley Harrington, the company which owns rival social publisher Unilad, following the news that Unilad had entered administration earlier this month. “As of today, LADbible Group and Unilad Group are now united under the same roof. This transforms the media landscape worldwide,” said LADbible in a statement. “Bringing these brands together makes us the largest social video publisher ever, and a youth media brand to be reckoned with, having over 120 million followers across our social channels. In August alone, our combined videos were viewed 4.5 billion times.”

Facebook Video Views Falling says Ampere Analysis
The proportion of Facebook users who watch video on the platform is falling according to research from Ampere Analysis. A study from Ampere found that the proportion of US Facebook users who had watched video on Facebook over the past month had fallen to 23.7 percent, from 35.5 percent in Q3 2016. A number of European countries also saw a similar, though smaller, decline. The trend might be seen as particularly worrying given Facebook’s efforts to push further into video via Facebook Watch, with these figures suggesting Facebook’s efforts aren’t necessarily bearing fruit.

YouTube Adds TV Screen Device Category
YouTube introduced new capabilities this week which will allow advertisers to tailor campaigns for connected-TV’s by adding TV screens as a device category. The change will mean that advertisers can adjust which creative is shown and how they bid when an impression is offered on a connected-TV.

The Week for Agencies

Publicis Reutrns to Growth, Proceeds with Plans to Sell Health Services Business
After a slump in last quarter’s financial results, Publicis Groupe returned to growth in its Q3 results, with net revenue rising 1.3 percent to €2.2 billion. Publicis CEO Arthur Sardoun attributed the return to growth in part to having gained new global clients in the first quarter including Merceds-Benz, Carrefour and Marriott International. Sardoun also said the group will proceed with plans to sell Publicis Health Solutions, which was largely blamed for Publicis’ struggles in Q2.

ANA Study Finds “Explosive Growth” of In-House Agencies
Seventy-eight percent of the Association of National Advertisers’ (ANA) members have in-house agencies, according to a study released by the trade-group this week, up from 58 percent in 2013.  On average, around 60 percent of advertising assignments are now handled by in-house agencies. However the report also examined the factors which encourage brands to continue working with external agencies, finding that where work is particularly complex or requires specific skills, brands are more likely to work with an external agency.

Brexit Uncertainty is Restricting Marketing Budgets says IPA
Uncertainty around the UK’s departure from the EU is putting pressure on marketing budgets according to the Institute of Practitioners in Advertising’s (IPA) latest Bellwether Report. Marketing budgets overall increased in Q3, but by the lowest proportion in nearly three years. “With ongoing Brexit uncertainty, it is perhaps no wonder that companies are having to be more cautious with their marketing spend and are inevitably increasingly downcast about their financial prospects,” said Paul Bainsfair, director general of the IPA.

Omnicom Stocks Surge Despite Q3 Revenue Drop
Omnicom’s Q3 results released this week saw net income increase 13.4 percent year-on-year to $298.9 million, and organic revenue growth of 2.9 percent, resulting in Omnicom shares rising over nine percent in the wake of the announcement. Overall global revenues for the company dropped 0.1 percent to $3,714 million, but the company blamed this in part on a negative foreign exchange rate impact, and on a disposition of some of its assets as it looks to increase its focus on digital marketing.

Hires of the Week

NBCUniversal Shakes Up Ad Sales Team
NBCUniversal this week appointed Laura Molen and Mark Marshall as presidents of NBCU’s ad sales division. The two will supervise national sales efforts for different sections of NBCUniversal’s portfolio, and will report to NBCU’s chair of advertising sales and partnerships Linda Yaccarino.

Unruly Appoints Betteridge as UK Commercial Director
Unruly announced this week it has appointed Saint Betteridge as UK commercial director. Betteridge will be responsible for heading up the UK sales teams of Unruly, and building relationships with agency partners, and will report to EMEA MD Jason Trout.

Tremor Video DSP Names Edward Shannon Head of Client Success
Tremor Video DSP announced on Wednesday it has appointed Edward Shannon as its new head of client success. Tremor says the appointment marks a solidifying of its commitment to client service, and that Shannon will be responsible for expanding and leading Tremor Video DSP’s client success teams across the country.

This Week on VAN

Many Publishers are Falling Short on GDPR with Inadequate Consent Tools says IAB’s Hartsuiker, read more on VAN

How Shared Devices Cause Problems for Targeting on YouTube, read more on VAN

Taking Risks is the Safest Option for Competing with Tech Giants says Paddy Power Betfair’s Mäki, read more on VAN

Ooyala Bought Out by Management, read more on VAN

Why Voice Search Could be a Game Changer for OTT, read more on VAN

We Need to Address Concerns About Data Leakage says SpotX’s Siotis, read more on VAN

Attribution Modelling is No Longer a Black Box Science says GroupM’s Simon Thomas, read more on VAN

Agencies Must Communicate for P&G’s Multi-Agency Model to Work says Havas’ Houssaini, read more on VAN

Video Viewability Standards Aren’t Fit for Purpose for OTT says IAS’ Astbury, read more on VAN

We’ll See GDPR-Like Legislation in the US Within Next Two Years says Simulmedia’s Dave Morgan, read more on VAN

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