Facebook is at risk of losing accreditation that gives advertisers confidence to invest in the social network

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By CAPosts 04 May, 2020 - 05:02pm 777 views

The social network is back in the magnifying glass because of trust issues (Photo: Johanna Geron/ Reuters)

Facebook is at risk of losing a prestigious assessment that credits it to advertisers ver invest to post on the social network, as the company never responded to the concerns generated by an audit that pointed out its concern about the measurement and performance of the ads.

Thus revealed a letter obtained by the Wall Street Journal of the Media Rating Council (MRC), a respected non-profit organization that is responsible for measuring, valuing and establishing levels of trust in the media.

In the missive, the organization warned Mark Zuckerberg's company that could deny it the "seal of approval" because of deficiencies in how it reports the effectiveness of the advertising it sells to others, i.e. that there are doubts about whether advertisers are properly receiving the service they hired.

Mark Zuckerberg's company has 60 days to respond to MRC concerns (Photo: Erin Scott/ Reuters)

"The Committee feels confident that Facebook's lack of detailed responses and action plans over the next 60 days will lead them to take negative action. This feedback should be considered a strong message to Facebook," says the letter obtained by the US newspaper.

This accreditation, issued by the Media Rating Council, is one of the main credentials that companies like Facebook have to attract investor confidence in ads, one of the components that brings the most money to the social network.

Losing this "quality certificate" in have no formal consequences, but it could have a significant impact on how brands and companies that come to Facebook to advertise reasignan your money on that social network for the future.

The impact of losing this accreditation would be to the confidence of advertisers, who seek certainty in investing their money (Photo: Reuters)

In the first quarter of 2020, the social network amassed about $17 billion in ad revenue. For this reason, Facebook was "disappointed" that the letter had been made public. "We will continue to work with him on that accreditation, as we have done since 2016, they announced.

In addition, the Media Rating Council's letter restood the tensions between the world's largest social network, and advertisers desperately seeking to verify that the billions of dollars they invest in Facebook platforms are performing they expect.

In its warning letter, the MRC noted that Facebook has not addressed the concerns of advertisers arising from Ernst & Young's audit in 2019, in particular on how it reports and measures video ad data.

The company's shares are under the magnifying glass (Photo: Loic Venance/ AFP)

"We need these reviews to be completed. We need to know if these measures can be trusted," he said to Wall Street Journal an advertising industry executive. According to the CRF, the audit is still in an "intermediate phase".

This audit process began after it was revealed in 2016 that Facebook had oversized view statistics in its videos for more than two years. The error inflated the figures even above 80%, according to the social network, which created unprecedented pressure for the review of their internal processes.

The company committed to the MRC to give you access to the data needed to evaluate its standards each year. However, the letter revealed that in 2018, the Board maintained its accreditation, but did not award additional quality seals to Facebook.

Among the organization's main concerns is that the social network has failed to properly separate statistics for video ads and static ads, which prevents advertisers from making meaningful comparisons.

The company has not separated the measurement of video ads and fixed ads, which has caused problems to measure their impact (Photo: AP)

In addition, the MRC wants Facebook to disclose its efforts to monitor fake accounts on the platform and information about ad impressions that these "invalid accounts" also add to the statistics.

Finally, The Council seeks an explanation to understand why Facebook requested Ernst & Young to suspend its audit indefinitely. The company noted that continuing with it during the coronavirus epidemic that has impacted the United States and the world made it difficult to manage its own platform.

If Facebook doesn't respond to the CRF in the next two months, not only lose certification for video ads, but could be extended to the category of graphic ads already awarded to it to the social network.

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