Meta just suffered a major Facebook ad glitch that has advertisers asking about refunds
Mark Zuckerberg, chief executive officer of Meta Platforms Inc., speaks during the virtual Meta Connect event in New York, US, on Tuesday, Oct. 11, 2022.
Michael Nagle | Bloomberg | Getty Images
Over the weekend, Alex Gorlick experienced what he called the worst Facebook glitch he’s seen in the decade he’s worked in digital advertising.
Gorlick, the CEO of marketing agency Intensify, checked in on one of his client’s accounts on Sunday, and noticed that it had spent 90% of its daily Facebook ad budget by 9 a.m. That meant it had only 10% left for the remaining 15 hours of the day.
He then found that the problem was widespread, spanning his entire customer base. Gorlick said that all those advertisers had essentially just wasted most of their money for the day, spending roughly triple the amount they normally would to acquire a customer.
“The results were horrendous,” Gorlick told CNBC. “It’s the biggest malfunction I’ve ever seen on Facebook ads.”
For brands that are already lowering ad costs to manage through a sluggish economy and a mobile ad market that no longer allows for targeting based on user data, Facebook’s miscue is more than just an unfortunate blip. In low-margin industries, where every dollar counts, it can turn a profitable weekend into a big loser, while also raising further questions about the reliability of Facebook’s ad systems.
A spokesperson for Facebook parent Meta acknowledged there was an ad glitch but declined to provide details or an explanation as to why it happened.
“A technical issue that has now been resolved caused ad delivery issues for some advertisers,” the spokesperson said.
How Facebook ad auctions work
In a typical Facebook online ad auction, a company can allocate a certain amount of money to run ads on the social media service over the course of a day to maximize how many eyeballs see the promotion. It appears that on Sunday the Facebook ad system bundled many more ads than normal into the morning hours, resulting in a highly inefficient day.
Data analytics and marketing firm Varos provided data showing that, of the more than 3,000 ecommerce and direct-to-consumer companies that use its technology, the software bug caused a majority of them to experience a rise in cost per thousand impressions, or what those in the industry call CPMs.
About 36% of companies were “very significantly impacted” by the bug, meaning their CPMs at least doubled, Varos said. Varos CEO Yarden Shaked said another third of companies experienced “significant increases but not like bonkers.”
Shaked said the glitch resulted in a “bidding war for nothing.” He compared it to Costco selling a random toaster that suddenly garnered so much demand that the price spiked way beyond market value.
“Everyone came in in the middle of the night for some reason and started a bidding war over that old toaster,” Shaked said. “You know, it’s completely ridiculous.”
Data about the glitch provided by the advertising technology firm Proxima on 108 companies also revealed that these firms spent their “entire day’s budget in the first few hours of the day,” the company said.
Companies that implemented cost caps, or limits on their advertising campaigns, were not impacted by the glitch, Proxima noted. When companies turned off their ad campaigns because of the bug, some bigger brands took advantage and were able to run successful Facebook ad campaigns throughout the day because of a lack of competition.
Additionally, the Facebook ad bug impacted companies running ads tied to Earth Day.
“The fact that it was Earth Day on Saturday, April 22nd meant that brands running sales for Earth Day were the most impacted like organic, eco-friendly brands focused on Earth Day as a key selling period,” the company said.
Barry Hott, a performance marketing consultant, said that at the time of the bug, the situation for companies running Facebook ads seemed “pretty massive, very painful.”
In retrospect, however, Hott believes the overall impact of the ad error might be “pretty small,” considering in the grand scheme of things, companies occasionally deal with big Meta ad errors that impact their campaigns.
Hott noted that Facebook experienced a major ad glitch a day before Black Friday in 2020 as well as another similar bug earlier that summer.
Refunds?
The main issue for advertisers will be whether they get refunds from Meta because of the glitch, industry experts said.
The Meta spokesperson said the company is “conducting a detailed analysis that assesses opportunities for refunds.”
“We have more information on the refunds process here,” the spokesperson added in a statement.
Because of the glitch, “a bunch of advertisers and business owners had a really s—y day,” Hott said, adding that they will have a “crappy week” as they wonder if they will get refunds and if they do, will it be the full amount they believe they should be owed or chump change.
He recommends that if advertisers have access to a Meta customer support representative — a part of Meta that has been hit by layoffs — they need to ask frequently about refunds, or risk being ignored. Because retailers often make business decisions like how many products they should order or sell based on their online advertisements, the software glitch could also impact other areas in a company’s business than just merely an increase to their CPMs.
“Basically, no one at the company is going to care about this problem if nobody’s saying anything about it, so they kind of count on advertisers to forget about this in a week or two weeks,” Hott said. “I tell everyone— I’ve had to do this myself — when these issues happen, you know, make a big stink about it.”
Watch: Elon Musk inspired Zuckerberg to reduce Meta’s headcount
Charles Liang, chief executive officer of Super Micro Computer Inc., during the Computex conference in Taipei, Taiwan, on Wednesday, June 5, 2024. The trade show runs through June 7.
Annabelle Chih | Bloomberg | Getty Images
Embattled server maker Super Micro Computer said on Monday that it’s hired BDO as its new auditor and submitted a plan to Nasdaq detailing its efforts to regain compliance with the exchange. The shares jumped 23% in extended trading.
“This is an important next step to bring our financial statements current, an effort we are pursuing with both diligence and urgency,” Super Micro CEO Charles Liang said in a statement.
Super Micro is late in filing its 2024 year-end report with the SEC, and said earlier this month that it was looking for a new accountant after its previous auditor, Ernst & Young, stepped down in October. Ernst & Young was new to the job, having just replaced Deloitte & Touche as Super Micro’s accounting firm in March 2023.
Super Micro said it told Nasdaq that it believes it will be able to file its annual report for the year ended June 30, and quarterly report for the period ended Sept. 30. The company said it will remain listed on the Nasdaq pending the exchange’s “review of the compliance plan.”
Shares of Super Micro soared more than twentyfold over a two year period from early 2022 until their peak in March of this year. But the stock has been hammered on troubling news about its compliance with Nasdaq. Once valued at about $70 billion, the company’s market cap was at $12.6 billion at the close on Monday, following a 16% rally during regular trading.
Super Micro has been one of the primary beneficiaries of the artificial intelligence boom, due to its relationship with Nvidia. Sales last fiscal year more than doubled to $15 billion.
On Monday, Super Micro announced that it was selling products featuring Nvidia’s next-generation AI chip called Blackwell. The company competes with vendors like Dell and Hewlett Packard Enterprise in packaging up Nvidia AI chips for other companies to access.
Super Micro was added to the S&P 500 in March, reflecting its rapidly growing business and then-soaring stock price. Less than two weeks after the index changes were announced, Super Micro reached its closing high of $118.81.
The troubles began within months. In August, Super Micro said it wouldn’t file its annual report with the SEC on time. Noted short seller Hindenburg Research then disclosed a short position in the company, and said in a report that it identified “fresh evidence of accounting manipulation.” The Wall Street Journal later reported that the Department of Justice was at the early stages of a probe into the company.
The month after announcing its report delay, Super Micro said it had received a notification from the Nasdaq, indicating that the delay in the filing of its annual report meant the company wasn’t in compliance with the exchange’s listing rules. Super Micro said the Nasdaq’s rules allowed the company 60 days to file its report or submit a plan to regain compliance. Based on that timeframe, the deadline was Monday.
WATCH: Super Micro is a sell due to accounting irregularities
Kelly Steckelberg attends an Evening from the Heart LA 2022 Gala hosted by the John Ritter Foundation for Aortic Health at Valley Relics Museum in Van Nuys, California, on May 5, 2022.
Araya Doheny | Getty Images
Canva, a high-valued design software startup that competes with Adobe, said Monday that it hired Kelly Steckelberg as its chief financial officer, five years after she helped take Zoom public and then guided the company through its Covid-19 pandemic surge.
Founded in 2013, Canva was valued recently at $32 billion, a drop from its peak of $40 billion in 2021.
“Kelly’s impressive track record as a strong leader and strategic thinker, combined with her proven expertise in scaling enterprise companies, make her the perfect addition to our leadership bench,” Canva said in an emailed statement.
Canva is generating about $2.5 billion in annualized revenue and boasts 220 million monthly users. The company is widely viewed as a top initial public offering candidate for venture-backed tech companies after a historically slow period for new offerings dating back to early 2022.
On Monday, ServiceTitan, which sells software for the trades, filed to list on the Nasdaq. Cerebras, a maker of artificial intelligence chips, has been on file since late September, and online lender Klarna said last week that it has confidentially filed its IPO paperwork with the U.S. Securities and Exchange Commission.
A Canva spokesperson declined to comment on the startup’s timeline for an IPO.
Steckelberg held financial positions at Cisco and was CEO of online dating company Zoosk before joining Zoom in 2017. Steckelberg is based in Austin, Texas, while Canva has its headquarters in Sydney, Australia.
Zoom went public with Steckelberg’s help in 2019. The video-chat company saw its market cap soar to upward of $160 billion in October 2020, early in the Covid-19 pandemic, as users working from home swarmed to the app. Zoom has since lost more than 85% of its value.
Steckelberg announced her departure from Zoom in August after seven years at the company. Last month, former Microsoft executive Michelle Chang replaced Steckelberg as Zoom’s CFO.
Canva’s previous finance chief Damien Singh resigned in February after the company said it was conducting an internal investigation surrounding inappropriate behavior.
ServiceTitan offices in Draper, Utah.
Google Earth
ServiceTitan, a company that sells software to contractors such as plumbers and roofers, on Monday filed to go public on the Nasdaq under the ticker symbol “TTAN.”
The filing suggests that investors could be getting more interested in next-generation software companies. Just a few, including Reddit and Rubrik, debuted on public markets in the U.S. this year, and chipmaker Cerebras filed for an initial public offering. There were basically no tech initial public offerings in 2021 or 2022 as central bankers pushed up interest rates to flight inflation, making investors less willing to bet on money-losing challengers.
Based in Glendale, California, ServiceTitan offers cloud software for advertising, scheduling jobs, dispatching, producing invoices and taking payments. It had a $35.7 million net loss on $193 million in revenue in the quarter that ended on July 31, according to the filing. Revenue was up about 24% year over year, and the quarterly loss had narrowed from almost $52 million.
ServiceTitan’s revenue growth rate will stand out for people investing in cloud stocks, who have seen rates sag with few new public companies in the sector. The average growth rate for Bessemer’s Nasdaq Emerging Cloud Index, the basis for the WisdomTree Cloud Computing Fund, is 16.6%.
The company was originally founded in 2007 by Ara Mahdessian and Vahe Kuzoyan, whose fathers were both residential contractors. While most ServiceTitan customers are small and medium-sized businesses, it has started focusing more on selling products to big companies and construction customers, according to the filing.
ServiceTitan plans to keep up to 5% of shares in the IPO for eligible clients, the founders’ friends and family members and others through a directed share program.
Investors include Battery Ventures, Bessemer Venture Partners, Iconiq and TPG. Iconiq on its own controlled 24% of the compan’s Class A shares.
Competitors include Salesforce and SAP, along with specialty companies such as HouseCall Pro, Jobber and Workwave.
Goldman Sachs, Morgan Stanley, Wells Fargo and Citigroup are among the company’s IPO underwriters.
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