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

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2024-04-28 16:30:03

By Amrita Khalid , one of the authors of audio industry newsletter Hot Pod. Khalid has covered tech, surveillance policy, consumer gadgets, and online communities for more than a decade.

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.