Facebook Inc. is offering millions of dollars in credits to some advertisers after discovering a glitch in a tool that tells advertisers how effective their ads may be in driving results, such as getting consumers to download an app or purchase a product.
Facebook’s “conversion lift” tool overestimated some campaign results for 12 months, the company quietly told its advertisers this month. The glitch skewed data that advertisers use to decide how much money to spend with the company.
The issue is particularly acute for certain categories such as retail, where marketers are spending as much as 5% to 10% more on Facebook and other performance-centric advertising channels to recover business lost during the early stages of the pandemic, said the chief executive of one digital agency that spends hundred of millions of dollars advertising on Facebook every year.
Facebook’s offer of credits extends to some advertisers that used the tool when the error went undetected, from August 2019 through August 2020.
“While making improvements to our measurement products, we found a technical issue that impacted some conversion lift tests,” said a Facebook spokesperson in an email. “We’ve fixed this and are working with advertisers that have impacted studies.”
Facebook, which said it fixed the error in September, told advertisers about it this month, according to a memo that Facebook sent clients. The company is basing the amount of credits it is issuing to advertisers on an analysis that shows how much the error may have affected their actual investments during the period following the lift study.
Some ad buyers are also questioning the analysis Facebook is using to determine advertisers’ compensation—criticizing the tech giant for not being transparent enough in how it determined who receives ad credits and how, exactly, compensation was calculated, as well as details on steps Facebook is taking to ensure such errors don’t occur again.