Facebook advertisers are asking for refunds after outage chaos
The Great Outage of 2019 forced Facebook advertisers to take a big bath last Wednesday, and there's little hope that the social network will make good on any potential losses. Even if it did, the recompense would likely be small.
David Herrmann, co-owner of Social Outlier, a social media agency that he says handles about $400,000 in daily ad spending on Facebook, was one of the marketers locked out of Facebook Ads Manager when it went down with the rest of the social network and its properties for at least 12 hours.
"I was just locked out, seeing the credit card spending all this money," Herrmann says. One client's account spent the usual $19,000 in ads, but only generated $2,000 in sales as a result, when it typically clocks $40,000 to $60,000 from its Facebook campaigns each day, Herrmann says. "The shutdown created chaos in the auction," he says, adding that some advertisers were paying $270 for ads that typically cost $30.
Herrmann and other marketers say they have been in touch with Facebook representatives to sort through the wreckage and even discuss possible refunds.
"It's hard to know the true damage for probably the next week or so," Herrmann says. "Facebook has delayed attribution so it might come back not as bad as we thought." Delayed attribution means the advertisers don't see the results of the campaigns until days or even weeks after they run.
Even without a full accounting, the damage is clearly widespread. More than 6 million advertisers on Facebook are mostly concerned with performance, which is dependent on the stability of the platform, and the outage was another reminder that it can't always be trusted. In November, Facebook Ads Manager crashed at the worst possible time, right before Black Friday. Herrmann says he has been moving more money to other ad platforms, specifically Snapchat.
A Facebook spokesman said in an email that the company would not comment on providing refunds. Marketers say refunds are rare, and even when they are provided they are typically small.
Akvile DeFazio, owner of social media agency Akvertise, says Facebook notified ad buyers last year about refunds over minor accounting discrepancies. One of her midsize advertisers got a refund of $30.
"Many of our accounts did get refunds," DeFazio says. "I imagine we may see that again later this year once they balance their books."
During the breakdown last week, DeFazio says she had ad clients who spend hundreds of thousands of dollars a day on Facebook unable to meet their daily goals. It was a major disruption to the businesses, but she also says that the losses may not have been as bad as originally feared.
"Each account looks like it only spent about half of its daily spend and served about half of the impressions as they typically do on a given day," she says.
Jason Portnoy, owner of Jport Media, says that he was afraid to tally up the likely losses his ad clients suffered last week. "You're watching something you know should not be running and there's no way to stop it," Portnoy says. "You would have turned off spending hours ago, and instead you're just watching more money go."
Portnoy says he'll ask for a refund, but doesn't expect it will do much.
In spite of its flaws, Facebook stands to remain the most important sales channel for performance marketers, the type of ad buyers that demand immediate returns from their campaigns, whether that's direct sales, website visits or new users.
"Despite what happened, I still think Facebook is one of the best advertising platforms in the world," Portnoy says. "It's just unfortunate this happened and put advertisers in a bad situation."