Facebook is in danger of losing a key accreditation from the Media Rating Council, a nonprofit that certifies the reliability of audience measurement services.
The platform is in the middle of an annual audit that puts certain areas under scrutiny, including desktop display impressions, mobile web advertising, mobile application advertising, invalid traffic and the minimum standards the latter of which all MRC members adhere to.
MRC already addressed several concerns it has with Facebook in a letter to the company, The Wall Street Journal reported, including its failure to “separate statistics for video advertising from those for static display ads.”
A spokesperson for Facebook said the company acknowledged it had “exchanges” with MRC, which “are part of the audit process,” and would continue working with it on accreditation. MRC declined to comment on the Facebook audit.
Facebook received MRC accreditation in 2018 after mounting industry pressure related to its own improper reporting of video ad metrics. At the time, ad buying agency Publicis Media found that Facebook overestimated average video watch time between 60-80%. In 2018, Facebook was accredited for newsfeed impressions on desktop, mobile and in-app display ads, while Instagram was approved for its in-app display ads.
Facebook, which is seeking certification for additional ad measurements, could be denied that new seal of approval and possibly lose the original ones given in 2018.
While it’s voluntary to go through and MRC accreditation doesn’t carry legal weight, it is a symbolic way to legitimize a company’s ad business for the industry.
But two years later, would the loss of this third-party accreditation actually hurt Facebook’s standing with advertisers and media buyers? Or is Facebook—which raked in $17.4 billion in ad revenue in the first quarter of 2020—too big and too powerful to be checked?
Jed Meyer, managing director, North America at the independent media and marketing consultancy Ebiquity, said he and his clients are seeking “trust and transparency” from Facebook.
“In an era where advertisers are seeking to understand the opportunity to overcome walled gardens and connect with consumers across media touch points, this potential development is a step backwards,” Meyer said. “Third-party measurement and endorsements from independent audit firms like the MRC are critical for advertisers and they gauge where to place their media and marketing investments.”
But other buyers have expressed less concern, saying that as long as Facebook is delivering results for their clients, that’s what matters most.
“The majority of our clients are performance based, so they care more about lower [funnel] metrics like ROAS and Incremental Sales Lift,” said Melanie Rhoads, group director, strategic accounts at Nexstar Digital agency HYFN. “As long as Facebook continues to produce positive results for them, I don’t imagine them shying away from the platform.”
However, Rhoads did note that if Facebook’s video view metrics fail MRC review, “then it will be harder to compare video performance cross-channel.”
Josh McClauss, senior director of marketing at digital marketing agency Metric Theory, said that the story here is “probably about how little MRC accreditation means to Facebook or really any of the walled gardens.”
“They trade on how well their ads deliver sales, leads, users and marketers will put their money anywhere that happens, so impression metric assurance is pretty far down the list of concerns,” McClauss said. “I’d imagine it matters somewhat to the very biggest advertisers out there, but not to the vast majority of the ad spend they bring in.”
Zenefits, a client of Metric Theory, agreed with McClauss on the matter.
“While the MRC accreditation is important to us as a brand, it’s less important to our leads, prospects and sponsors, to be candid,” said Rob Stevenson, director of performance marketing for the human resources software company. “The decision on the efficacy of Facebook and Facebook video as a demand [generation] source belongs to the brands, not to MRC.”
The MRC, originally the Broadcast Rating Council, was born out of the quiz show scandals of the 1950s after which the U.S. government sought to set up a nongovernmental body to police media audience measurement. Its popularity only increased with the industry’s reliance on digital advertising, said David Gunzerath, svp and associate director at MRC.
While the council’s staff is small at seven people, its work has far reach. Its 161 members include trade bodies like the Interactive Advertising Bureau and the Association of National Advertisers, media entities like Condé Nast and CBS Corporation and tech companies like Facebook, Google and Microsoft.
The council employs third-party accountants to audit each of its accredited members every year, a process that takes three to four months, Gunzerath said. After that, auditors present their findings to a small audit committee of members who then make a recommendation to the full membership. Decisions about accreditation—including the ones about Facebook—are made with a majority vote by the 161 members.
For a company like Facebook, the MRC accreditation can be a way to assess an ad spend, according to Gunzerath.
“Marketers are spending billions of dollars on advertising on platforms and television and all sorts of media outlets and what they want to do is validate that they’re not throwing that money down a black hole,” he said.