Image: Cath Virginia / The Verge
It was Valentine’s Day when Meta’s ad platform started going off the rails. RC Williams, the co-founder of the Philadelphia-based marketing agency 1-800-D2C, had set one of Meta’s automated ad tools to run campaigns for two separate clients. But when he checked the platform that day, he found that Meta had blown through roughly 75 percent of the daily ad budgets for both clients in under a couple of hours.
Williams told The Verge that the ads’ CPMs, or cost per impressions, were roughly 10 times higher than normal. A usual CPM of under $28 had inflated to roughly $250, way above the industry average. That would have been bad enough if the revenue earned from those ads wasn’t nearly zero. If you’re not a marketer, this might feel like spending a week’s worth of grocery money on a prime cut of wagyu at a steakhouse, only for the waiter to return with a floppy slider.
The Verge spoke to several marketers and businesses that advertise on Meta’s platforms who tell a similar story. Meta’s automated ad platform has been blowing through budgets and failing to deliver sales. Small businesses have seen their ad dollars get wiped out and wasted as a result, and some have said the bouts of overspending are driving them from Meta’s platforms.
“Meta’s unwillingness to be transparent or accountable with the performance issues and glitches is causing mass uncertainty.”
“Meta’s unwillingness to be transparent or accountable with the performance issues and glitches is causing mass uncertainty,” Karl Baker, founder of meditation startup Mindfulness Works, wrote in a message to The Verge.
The faulty ad service in question, known as Advantage Plus shopping campaigns, is part of a full suite of AI-enabled ad tools that Meta pitches to businesses as a faster and more efficient alternative to manual ad campaigns. To create an ad campaign, advertisers upload their creative assets, pick their conversion goals (e.g., getting more customers to make purchases on Instagram), and then set their budget caps. Meta hyped Advantage Plus shopping campaigns during earnings calls as a carefree, “set it and forget it” automated solution to online ads. But that hasn’t been the case, marketers say.
Advantage Plus shopping campaigns have been unpredictable, seemingly working well on some days and then not so well on other days. The subreddit r/FacebookAds has become a sort of 24/7 help desk for Advantage Plus. Recent headings discussing the issues include “Advantage+ sucks,” “Is Facebook broken rn,” and “Is it just me?”
“People are always saying, ‘Is it me?’ or ‘Is it Meta?’” Baker said.
What Williams and many other marketers thought was a one-time glitch by Advantage Plus ended up becoming a recurring incident for weeks. “Since February 14th, [Advantage Plus] has overspent on numerous occasions and ignored the cost caps we have in place on it,” he said.
How is your Meta performance over the last 7 days?
— RC Williams (@thercwilliams) March 6, 2024
Problems have persisted into April. “We have a couple of clients for whom we completely stopped Advantage Plus due to these anomalies,” said Aniruddha Mishra, director of growth at Miami-based digital marketing agency Node Media. He noted that for some clients, CPMs on Meta were anywhere from three to four times more expensive than they were last year.
Advertisers say getting support from Meta has been a challenge, too. Meta laid off thousands of employees over the past year and gutted many of its customer support teams. As Digiday reported, Meta’s ad accounts teams were downsized, and many client inquiries are now being directed to AI chatbots. Several of the marketers that The Verge spoke to said that there’s been a noticeable decline in responsiveness from Meta since the transition.
“The only thing [Meta] acknowledged was there was a platform bug on February 14th and apologized for the inconvenience.”
“The only thing [Meta] acknowledged was there was a platform bug on February 14th and apologized for the inconvenience,” said Williams. “They didn’t tell us what actually happened.”
Meta eventually refunded 1-800-D2C for the incident, but Williams said it took him several tries to finally get someone from the company to acknowledge him. The company issued the refund almost a month after the incident.
While some users speculate that Advantage Plus is “glitching” or “broken,” Meta’s response has been to insist that the tool is functioning as it should.
“I’ve reached out to representatives at Meta, and I’ve been told that they’re not aware of any sort of glitch, which is truly shocking, because all my co-founder friends who work in e-commerce share this sentiment. They’re dealing with the same thing,” said Adriel Darvish, the CEO of a luxury handbag and jewelry service called Switch, in a phone interview with The Verge. “This is something universal that everyone is experiencing.”
pic.twitter.com/RZuulnWz8R
— Karl Baker (@KarlMindfulness) April 2, 2024
With the problems continuing to pile on, Williams said his marketing firm completely halted its use of Advantage Plus in early April. Instead, they’ve gone back to the old-fashioned method of buying Facebook and Instagram ads manually. Notably, going back to the pre-AI, pre-automated way of doing things hasn’t really taken a toll on the firm’s human labor force.
“Maybe an extra 10 to 20 minutes or so to build out the ad sets, but nothing crazy,” said Williams.
Meta first launched Advantage Plus shopping campaigns globally in the fall of 2022, when the state of online advertising was in an uncertain place. Just a year before, Apple had launched its App Tracking Transparency feature with iOS 14.5, giving users an easy way to opt out of the third-party app-based tracking that powers many online ads. Meta opposed the change, saying it would “change the internet as we know it” and threaten the future of many online businesses.
But Meta’s real concern was no doubt the threat to its own ad business, which chalked up a $10 billion dip in ad revenue in 2021 due to Apple’s changes. Targeted ads were no longer as effective since brands no longer had access to as much data, and they were becoming more expensive to boot. As a consequence, brands cut back on their online ad spend.
With Advantage Plus shopping campaigns, Meta promised that AI and machine learning models could effectively replace the big gaping hole left by Apple’s privacy update.
In lieu of tracking users, Advantage Plus uses the advertiser’s own first-party sales data to help target ads. But online advertisers would be effectively handing the reins over to Meta and no longer have access to the granular targeting controls and detailed analytics they did prior to Apple’s privacy changes.
Although there was a bit of a “learning curve” with Advantage Plus shopping, the tool gradually began to improve. Brands noticed their AI-driven Meta ad campaigns were performing well and poured more of their budgets into the platform. Adweek reported that by April 2023, marketers who had ditched Meta for TikTok ads and newer opportunities like connected TV were starting to come back.
Advertisers had a honeymoon period with Advantage Plus last year, especially as Meta began packing it with new features. “Advantage Plus was working so well at this point, for most of the clients, that almost 50 to 70 percent of their ad budget is on Meta’s Advantage Plus campaigns. There are so many targeting and evolutions they’ve done in the past year and a half. It delivers a really strong performance if you know how to tweak the right parameters,” said Mishra.
In an email to The Verge on April 15th, Meta spokesperson Kash Ayodele said the company had fixed a “few technical issues” with the Advantage Plus ad platform. “Our ads system is working as expected for the vast majority of advertisers. We recently fixed a few technical issues and are researching a small amount of additional reports from advertisers to ensure the best possible results for businesses using our apps.”
But marketers are still complaining about underperformance on the platform. “Things have recovered for many, but not all. It’s been a very turbulent end to Q1 and beginning of Q2,” wrote media buyer David Herrmann in a direct message to The Verge.
The dramatic increase in cost per click (CPC) and CPM is not just a Meta problem — online ads as a whole are getting costlier due to what marketers say are increased inefficiencies, which automation has only made worse. This significantly decreases profits for individual advertisers. And fixing this problem may be more complicated than fixing a “glitch” or series of glitches on Advantage Plus, especially since the millions that Meta as well as Google have poured into automated advertising hasn’t led to more successful ad campaigns.
“The performance of accounts and campaigns hasn’t intrinsically increased [over the last three years],” noted Hawke Media’s Areen Mayelan.
When ad campaigns are automated, such as with Meta’s Advantage Plus, “things get brushed under the rug,” said Mayelan. Everything from loose keywords to loose audiences to low-quality ads all effectively become inefficiencies that increase the cost of ads for brands. “Inefficiency results in an increase in CPCs and CPMs, because you’re creating artificial ‘competition’ where there otherwise might not be.”
Meanwhile, Meta only stands to benefit from the boost in ad revenue. According to Meta’s first quarter earnings call on Wednesday, its ad business is doing just fine. Ad revenue amounted to $35.64 billion for the quarter, an impressive jump of 27 percent from this time in 2023.
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