Meta’s ‘set it and forget it’ AI advertising tools are failing and wasting money

It was Valentine’s Day when Meta’s ad platform started to go off the rails. RC Williams, co-founder of Philadelphia-based marketing agency 1-800-D2C, set up one of Meta’s automated ad tools to run campaigns for two separate clients. But when he checked the platform that day, he discovered that Meta had blown through about 75% of both clients’ daily advertising budgets in less than a few hours.

Williams said On the edge that ad CPMs, or cost per impressions, were about 10 times higher than normal. A normal CPM of less than $28 ballooned to about $250, far above the Industrial average. This would be bad enough if the revenue earned from these ads wasn’t almost zero. If you’re not a marketer, it can be like spending a week’s grocery money on a prime cut of wagyu at a steakhouse, only for the waiter to return with a flexible slider.

On the edge spoke with several marketers and companies that advertise on Meta’s platforms who tell a similar story. Meta’s automated ad platform is running over budget and failing to generate sales. As a result, small businesses have seen their advertising dollars wiped out and wasted, and some have said that bouts of overspending are driving them off Meta’s platforms.

“Meta’s reluctance to be transparent or accountable for performance issues and failures is causing mass uncertainty,” wrote Karl Baker, founder of meditation startup Mindfulness Works, in a message to On the edge.

The faulty ad service in question, known as Advantage Plus shopping campaignsis part of a full suite of AI-enabled ad tools that Meta offers businesses as a faster and more efficient alternative for manual advertising campaigns. To create an ad campaign, advertisers upload their creative assets, choose their conversion goals (for example, getting more customers to shop on Instagram), and then set their budget limits. Meta touted Advantage Plus shopping campaigns during earnings calls as carefree, “set it and forget it” automated solution for online ads. But that wasn’t the case, marketers say.

Advantage Plus’ shopping campaigns have been unpredictable, seemingly working well on some days and not so well on others. The subreddit r/FacebookAds has become a sort of 24/7 technical support for Advantage Plus. Recent titles discussing the issues include “Advantage+ Sucks,” “Is Facebook Broken,” 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 flaw with Advantage Plus turned out to be a recurring incident for weeks. “Since February 14th, [Advantage Plus] overspent on several occasions and ignored the cost limits we set,” he said.

The problems persisted until April. “We have some clients for whom we have completely stopped Advantage Plus due to these anomalies,” said Aniruddha Mishra, chief growth officer at Miami-based digital marketing agency Node Media. He noted that for some customers, CPMs on Meta were three to four times more expensive than last year.

Advertisers say getting Meta’s support has also been a challenge. Meta laid off thousands of employees last year and gutted many of its customer support teams. As Digidia reported, Meta’s ad account teams have been reduced and many customer inquiries are now being directed to AI chatbots. Many of the marketers who On the edge Spoke said there has been a notable decline in Meta’s responsiveness since the transition.

“The only thing [Meta] acknowledged that there was a bug in the platform on February 14 and apologized for the inconvenience,” Williams said. “They didn’t tell us what really happened.”

Meta ended up reimbursing 1-800-D2C for the incident, but Williams said it took several attempts to finally get someone at the company to acknowledge it. The company issued the refund almost a month after the incident.

While some users have speculated that Advantage Plus is “flawed” or “broken,” Meta’s response has been to insist that the tool is working as it should.

“I contacted Meta representatives and was told that they are not aware of any kind of failure, which is really shocking because all of my co-founder friends who work in ecommerce share this sentiment. They’re dealing with the same thing,” said Adriel Darvish, CEO of a luxury handbag and jewelry service called Switch, in a phone interview with On the edge. “This is a universal thing that everyone is experiencing.”

With problems continuing to mount, Williams said his marketing company completely stopped using Advantage Plus in early April. Instead, they went back to the old-fashioned method of manually buying ads on Facebook and Instagram. Notably, going back to the pre-AI, pre-automated way of doing things hasn’t really impacted the company’s human workforce.

“Maybe an extra 10 to 20 minutes to build the ad sets, but nothing crazy,” Williams said.

goal released for the first time Advantage Plus shopping campaigns globally in fall 2022, when the state of online advertising was in an uncertain situation. Just a year earlier, Apple had launched its App Tracking Transparency feature with iOS 14.5, offering users an easy way to opt out of the third-party app-based tracking that powers many online ads. Meta opposed the move, saying it would “change the Internet as we know it” and threaten the future of many online businesses.

But Meta’s real concern was undoubtedly the threat to its own advertising business, which saw a $10 billion drop in advertising revenue in 2021 due to Apple’s changes. Targeted ads were no longer as effective as brands no longer had access to as much data and were becoming more expensive. As a result, brands have reduced their spending on online advertising.

With Advantage Plus shopping campaigns, Meta promised that AI and machine learning models could effectively replace the huge hole left by Apple’s privacy update.

Instead of tracking users, Advantage Plus uses the advertiser themselves own sales data to help target ads. But online advertisers would effectively be handing the reins over to Meta and would no longer have access to the granular targeting controls and in-depth analytics they did before Apple’s privacy changes.

While there was a bit of a “learning curve” with Advantage Plus purchases, the tool gradually began to improve. Brands realized that their AI-based Meta ad campaigns were performing well and invested more of their budgets into the platform. Adsweek reported that in April 2023, marketers who had switched from Meta to TikTok ads and newer opportunities like connected TV were starting to to go back.

Advertisers had a honeymoon period with Advantage Plus last year, especially when Meta started packing it with new features. “Advantage Plus was working so well at this point for most clients that almost 50 to 70 percent of their advertising budget is on Meta’s Advantage Plus campaigns. There are so many directions and evolutions that they’ve made in the last year and a half. It delivers really strong performance if you know how to tune the right parameters,” said Mishra.

In an email to On the edge On April 15, Meta spokesperson Kash Ayodele said the company had fixed “some technical issues” with the Advantage Plus ad platform. “Our ad system is working as expected for the vast majority of advertisers. We recently fixed some technical issues and are researching a small amount of additional advertiser reporting to ensure the best possible results for businesses using our apps.”

But marketers still complain about the platform’s poor performance. “Things have recovered for many, but not all. It was a very turbulent end to the first quarter and beginning of the second quarter,” wrote media buyer David Herrmann in a direct message to On the edge.

The dramatic increase in cost per click (CPC) and CPM isn’t just a Meta problem – online ads as a whole are getting more expensive due to what marketers say are increasing inefficiencies, which automation has only made worse. This significantly decreases the profits of individual advertisers. And fixing this problem may be more complicated than fixing a “glitch” or series of flaws in Advantage Plus, especially since the millions that Meta and Google have invested in automated advertising have not led to more successful ad campaigns.

“Account and campaign performance has not intrinsically increased [over the last three years],” noted Hawke Media’s Areen Mayelan.

When ad campaigns are automated, as with Meta’s Advantage Plus, “things get swept under the rug,” Mayelan said. Everything from loose keywords to loose audiences to low-quality ads effectively become inefficiencies that increase the cost of ads for brands. “Inefficiency results in an increase in CPCs and CPMs, because you are creating artificial ‘competition’ where none would otherwise exist.”

Meanwhile, Meta will only benefit from increased advertising revenue. According to Meta’s Q1 earnings call on Wednesday, its advertising business is doing very well. Advertising revenue totaled US$35.64 billion in the quarter, a impressive jump of 27 percent from this time in 2023.