The miscalculation could be as much as between 60% and 80%, according to The Wall Street Journal.
The details came to light after agencies asked the social media giant for more information.
Facebook revealed that it was working on a new metric to fix a problem which exaggerated average video watch time because it was only taking into account views of more than three seconds.
A spokeswoman for Facebook said: "We recently discovered an error in the way we calculate one of our video metrics. This error has been fixed, it did not impact billing, and we have notified our partners both through our product dashboards and via sales and publisher outreach.
"We also renamed the metric to make it clearer what we measure. This metric is one of many our partners use to assess their video campaigns."