Facebook to compensate advertisers after an error distorts ad data

By Rahul Vaimal, Associate Editor
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Social media giant Facebook has once again being forced to pay millions of dollars in credits to advertisers on its platform after acknowledging a code error in its ad metric tool which showed how effective an ad was. 

The code error was identified with Facebook’s free “conversion lift” tool which tells advertisers how ads lead to sales, using a “gold-standard methodology” while connecting ads on Facebook’s platforms, including Instagram, to business performance.

The issue which was left unfixed for as long as 12 months is estimated to have affected several thousand advertisers who were made aware of the “miscalculation of the number of sales derived from ad impressions” earlier this month.

Facebook stated that only a “small number” of advertisers were affected, and they will get a “one-time credit.” The firm is expected to compensate advertisers depending on their spending which could lead to offering coupons worth tens of millions of dollars in some cases.

In its statement on the matter, the social media giant remarked that “while making improvements to our measurement products, we found a technical issue that impacted some conversion lift tests. We’ve fixed this and are working with advertisers that have impacted studies.”

The social media platform have had similar issues in the past as well. In September 2016, Facebook acknowledged that overestimated the average time people spent viewing video ads over a two-year period while in 2017, the platform was found making the false claim of reaching more people in some U.S. states and cities than official population data stated.

The current issue is expected to seriously impact advertisers, particularly in retail, where brands are spending as much as 5-10 percent or more on pushing their products on social media platforms.