Meta’s “set it and forget it” AI ad tools are misfiring and blowing through cash

🌈 Abstract

The article discusses issues with Meta's automated ad platform, particularly its Advantage Plus shopping campaigns, which have been causing problems for advertisers. It covers the experiences of several marketers who have seen their ad budgets rapidly depleted with little to show for it, as well as Meta's response to the issues.

🙋 Q&A

[01] Meta's Automated Ad Platform Issues

1. What issues have advertisers experienced with Meta's Advantage Plus shopping campaigns?

• Advertisers have seen their ad budgets rapidly depleted, with costs per impression (CPMs) spiking to 10 times higher than normal, while generating little to no revenue.
• The performance of the Advantage Plus campaigns has been unpredictable, working well some days and not others.
• Advertisers have had difficulty getting support and transparency from Meta regarding the issues.

2. How have advertisers responded to the problems with Advantage Plus?

• Some advertisers have completely stopped using Advantage Plus due to the issues.
• Many have reverted to manually buying Facebook and Instagram ads, which has not significantly increased their workload.
• Advertisers are frustrated by Meta's lack of transparency and unwillingness to acknowledge the problems.

[02] Impact on Advertisers

1. How have the issues with Advantage Plus impacted advertisers?

• Small businesses have seen their ad dollars get wiped out and wasted due to the problems with Advantage Plus.
• The unpredictability and overspending on the platform is driving some advertisers away from Meta's platforms.
• The dramatic increase in cost per click (CPC) and CPM is not just a Meta problem, but an issue across online advertising due to increased inefficiencies.

2. What is Meta's response to the issues with Advantage Plus?

• Meta has acknowledged a platform bug on February 14th but has not provided details on what actually happened.
• The company has insisted that Advantage Plus is functioning as intended, despite widespread reports of problems from advertisers.
• Meta has refunded one advertiser for the incident, but it took several attempts to get the company to acknowledge the issue.

[03] Meta's Automated Advertising Strategies

1. What was Meta's strategy with Advantage Plus shopping campaigns?

• Advantage Plus was pitched as a faster and more efficient automated solution to online advertising, to help replace the loss of targeting data due to Apple's privacy changes.
• Meta promised that AI and machine learning models could effectively replace the targeting capabilities lost from Apple's privacy update.
• Advertisers initially saw good performance from Advantage Plus, leading them to allocate a significant portion of their ad budgets to the platform.

2. How have the issues with Advantage Plus impacted Meta's ad business?

• Despite the problems with Advantage Plus, Meta's overall ad revenue grew 27% year-over-year in Q1 2023.
• The increase in ad costs due to inefficiencies actually benefits Meta, as it generates more revenue, even if it negatively impacts individual advertisers.
• Experts note that the millions Meta has invested in automated advertising has not led to more successful ad campaigns overall.