Facebook to reimburse clients after alleged misreporting of ad effectiveness

Facebook is reimbursing some advertisers after allegedly misreporting one of the measures of its ads' effectiveness over the course of a year. According to CNBC, its conversion lift tool encountered a glitch which allegedly impacted "thousands of ads" between August 2019 and 2020. Although the error was fixed in September, clients were only informed of it this month, CNBC said.

Nonetheless, the company is offering a credit to advertisers that have been "meaningfully affected" by the glitch. According to Facebook's website, conversion lift uses "a gold standard methodology" to measure the impact that Facebook, Instagram and Audience Network ads have on business performance. It compares the actions of real individuals in randomised test and control groups to measure the additional offline, online or mobile app business driven by Facebook, Instagram and Audience Network ads. 

In a statement to MARKETING-INTERACTIVE, Facebook's spokesperson said: "While making improvements to our measurement products, we found a technical issue that impacted some conversion lift tests. We have fixed this and are working with advertisers that have impacted studies." 

MARKETING-INTERACTIVE understands that the metric is non-billable and a small number of advertisers have impacted studies. Additionally, the advertiser impact is on a case-by-case basis depending on how they used the product. Facebook is awarding a one-time credit to advertisers that may have been meaningfully affected by this issue.

This is not the first time Facebook has acknowledged that it has mistakes in reporting. In 2016, the tech giant admitted that for two years, it "vastly overestimated" the average viewing time for video ads on its platform, the Wall Street Journal said. According to a post on its site in September 2016, Facebook said that about a month ago, it discovered an error in the way it calculated the average duration of video viewed.

The metric should have reflected the total time spent watching a video divided by the total number of people who played the video. Instead, it reflected the total time spent watching a video divided by only the number of “views” of a video. The company added that "the miscalculation overstated [the] metric".

"We sincerely apologise for the issues this has created for our clients. This error should not stand in the way of our ultimate goal, which is to do what’s in the best interest of our partners and their business growth," Facebook said then.

It is widely know that ads form a crucial chunk of Facebook's revenue. In October, it witnessed a 22% increase in ad revenue, from US$17,383 million in 2019 to US$21,221 million, in the third quarter of 2020. This was despite the ad boycott Facebook faced earlier in the year, with major brands such as Microsoft, Lego, Danone, Mars, Volkswagen Group, Diageo, and Coca-Cola temporarily pausing their advertising on the platform.

Additionally, the social media giant saw an increase of 12% in its daily active users, which it recorded an average of 1.82 billion for September 2020, an increase of 12% year-on-year. It also saw growth in its monthly active users, recording a number of 2.74 billion users, which is also an increase of 12% year-over-year. Facebook said then that it expects its fourth quarter of 2020 year-over-year ad revenue growth rate to be higher than its reported third quarter 2020 rate, which will be driven by continued strong advertiser demand during the holiday season.

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