[HN Gopher] How Facebook is trying to recover the money it lost ...
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How Facebook is trying to recover the money it lost during the
outage
Author : alek_m
Score : 246 points
Date : 2021-10-07 09:31 UTC (13 hours ago)
(HTM) web link (www.indiehackers.com)
(TXT) w3m dump (www.indiehackers.com)
| MisterBastahrd wrote:
| Facebook is the same company that has allowed a bunch of scam
| artists to advertise a $1500 ice machine for $30 (which is their
| S&H cost) while using another company's name in their ads. I
| can't remember the last time I got on facebook and saw a useful
| ad that wasn't either a scam or completely irrelevant.
| architweetka wrote:
| Did we ever hear what caused it?
| stepanhruda wrote:
| https://engineering.fb.com/2021/10/05/networking-traffic/out...
| Ziehm99 wrote:
| Es una buena alternativa para evitar que los anunciantes sigan
| generando dinero sin pagar membresias a Facebook, realmente fue
| una decision acertada.
| Bud wrote:
| This sounds like straight-up fraud to me. They promised one
| thing, and now, after an outage that was their own fault, they
| are intentionally warping and devaluing the nature of the
| advertising product they sold to customers, so that instead of
| Facebook deservedly absorbing that loss, customers will absorb
| it, instead.
| shadowgovt wrote:
| Not precisely fraud, but it is an example of the negatives of
| the product vendor (impressions, in this case) also owning the
| marketplace.
|
| It would be rational for advertisers to pull down their spend
| to avoid getting hit with devalued impressions. Ironically, if
| enough folks did, that could cause a panic, which would make
| things worse for FB.
| mannykannot wrote:
| I am no fan at all of Facebook, and I would tend to regard the
| prospect of a dispute between it and its advertisers as a good
| thing, but here's a slightly-expanded version of the passage
| quoted in the article:
|
| "We can also confirm that ads did not deliver during the time
| the systems were offline, and advertisers were not and will not
| be billed for ads during the outage. Ads have now resumed
| delivery and some advertisers may see accelerated delivery as
| our services recover from the outage. We encourage advertisers
| to review your bids and budgets to ensure they accurately
| reflect your marketing goals."
|
| One way of looking at this is that Facebook is notifying its
| advertisers that the outage will affect how advertising is
| delivered in the following days, and if advertisers want
| something else to happen, they will have to make the changes
| themselves. Facebook could reasonably claim that it does not
| know how any given advertiser would prefer the situation to be
| handled.
|
| Of course, if it is expensive or inordinately difficult to make
| such adjustments, then Facebook would come across as
| dissembling (and not for the first time.)
| jlund-molfese wrote:
| Is it not possible the ads are being shown to more people than
| usual due to greater usage of Facebook properties immediately
| following it coming back online?
|
| I can't find anything that indicates individuals are seeing more
| ads than usual as a result of the outage, besides the anecdote of
| the one agency in the article (but maybe the lower conversion
| rates can be explained by some other factors)
| alek_m wrote:
| It's not agency per-se; it's one agency managing multiple
| clients and seeing the same pattern across all of them.
| jlund-molfese wrote:
| Yes, but I wonder if this anonymous agency has clients all in
| the same geographic area or industry. The sample size is too
| small to draw definitive conclusions, because there might be
| confounding factors, or maybe the agency even made a mistake
| somewhere.
|
| Of course, the type of data that would be really useful here
| (detailed ad performance metrics by the hour, across all of
| Facebook) is the type fb would never willingly publish.
| fatnoah wrote:
| By showing 1/365 more ads every day for the next year?
| Forge36 wrote:
| A 50% conversion drop? I wonder what method they have to show ads
| faster
| willcipriano wrote:
| "We're really sorry that we didn't manage to get your ad about
| nursing homes in this months issue of AARP monthly, however we
| managed to get it into Rad Skateboarders Weekly so we will be
| sending you a invoice for it anyway."
| ineedasername wrote:
| Maybe just showing more of them in a page?
| pixl97 wrote:
| Remember back in the early 2000's before popup blockers were a
| thing? You'd hit a page and 100 popups fill the page. When you
| hit the X and it would spawn new popups filled with ads.
|
| Yea, that's FBs new business model :D
| saalweachter wrote:
| I do hear a lot of nostalgia for "the old internet".
| tonyedgecombe wrote:
| Showing ads for cars when the user searched for bars.
| intricatedetail wrote:
| Where is a tiny violin when you need it?
| ashtonkem wrote:
| Over a mere $60mil, no less. Literally nothing in the grand
| scheme of Facebook's profits.
| colinmhayes wrote:
| .2% of Facebook's gross income if anyone is wondering.
| pixelgeek wrote:
| This is the thing that I thought was interesting.
|
| I suspect that it has less to do with actual profits and more
| to do with some wanting to keep their quarterly ad impression
| numbers up
| furyg3 wrote:
| Yes this reeks of someones KPI needing to be hit.
| ashtonkem wrote:
| I think much specifically it's internal competition. My bet,
| I have no insider knowledge here, is that there are a bunch
| of individual product owners vying to look good compared to
| each other here. Nobody wants to have their weekly numbers
| look bad because they didn't accelerate delivery while their
| peers do, so as a whole the company does something bad for
| everyone over a trifling amount of profit.
| pixelgeek wrote:
| I think that is probably exactly what it is
| motoboi wrote:
| We all hate facebook. Ok. No problema.
|
| But Facebook is actually trying to help its costumers recover the
| money lost during the outage.
|
| US$ 60 million? Pff. Just ask every executive to skip one
| executive jet travel per week and they recover that in a month or
| less.
| Macha wrote:
| This doesn't seem _that_ strange. In online advertising, there
| are the concepts of pacing (to ensure the ad campaign delivers
| somewhat evenly over the lifespan - not because there's any
| evidence that it improves performance, but because the advertiser
| would feel miffed if you spent all the budget in the first day of
| their month long campaign), and frequency capping (attempting not
| to show the same ad to the same person too many times - clearer
| benefits to performance here).
|
| Both of these will limit the rate at which an ad spends money. If
| it doesn't get shown for a long period of time, both of these
| factors get reduced, and the ad can get selected more
| aggressively, particularly if you are a higher bidder than the
| ads that would have got chosen in your absence.
| ineedasername wrote:
| _pacing... not because there 's any evidence that it improves_
|
| In the limited experience I have in this arena, it does improve
| performance. Hitting someone a second time about t+2weeks had
| the biggest bump, and then the next biggest another month later
| at t+6weeks.
|
| I don't know if it's universally true, and the optimization may
| vary depending on the context and content, but pacing can
| definitely make a difference for some.
| Gigachad wrote:
| I don't think they were talking about the same person seeing
| the ad, but if you show 1000 people the ad a day for 10 days
| or show 10,000 people the ad in one day.
| Jenk wrote:
| Unless there is a guarantee there is 1,000 new people per
| day then it certainly does apply. I think the usual pattern
| for pacing is to cover multiple bases from repeat visits to
| trying to cast a wider net to catch people at the right
| time(s) both personally and in perhaps wider campaign with
| other sites/mediums.
| ineedasername wrote:
| That would be different, but I think still have a negative
| impact. You can't show 10,000 people the same number of ads
| in the same period of time as usual while also delivering
| ads faster. So it means you're showing people more ads than
| usual.
|
| But attention is a limited resource. If you throw more ads
| at me, I'm not necessarily going to respond to more of
| them. The more ads there are, the more it becomes
| background noise.
| Gigachad wrote:
| Facebook can show 1 ad campaign per day to the user base
| instead of 30 ads getting 1/30th of the target market
| each day over a month.
|
| To the individual user, they can't tell anything
| different between these two types of campaigns. It just
| makes the advertiser feel better that their money is
| lasting longer.
| ineedasername wrote:
| You can't speed that up en masse without showing more
| adds to the people than you normally would. If facebook
| is taking the backlog of all the ads from all the
| advertisers and pushing that out faster to the same group
| of users over a short period of time, there is no
| avoiding the fact that users will see more adds per unit
| of time during this time period.
| mountainb wrote:
| Sometimes pacing makes a huge difference, actually, and you can
| smurf your performance metrics to a better place by cutting out
| times, day ranges, demographics, and so on.
| shadowgovt wrote:
| Yeah, this news belongs in the pile "Things advertisers will
| probably care about," but it doesn't have a universal moral /
| ethical category. It's more a side-effect of existing rules
| being applied to an unusual circumstance (I doubt the rules
| were written with an eye towards "What if Facebook is down a
| whole day?" because that isn't supposed to ever happen). Some
| advertisers won't like the outcome, some will be ambivalent to
| it.
| stevespang wrote:
| This was Zuckerbergs idea - - so much of the hideous evil comes
| directly from the top . . .
| willcipriano wrote:
| Are we post honor? I have this magical machine that makes me,
| what ten million dollars an hour? After many years of constant
| service, one of my employees messes up and it goes down for a few
| hours. Rather then eating the loss, that isn't much of loss since
| my margins are as wide as the grand canyon, I crank the machine
| up so it runs faster and produces a inferior quality product.
|
| Did Veruca Salt grow up and get a job at Facebook?
| Clubber wrote:
| "That terminator is out there, it cant be bargained with, it
| cant be reasoned with, it doesn't feel pity or remorse or fear,
| and it absolutely will not stop... EVER, until you are dead!"
| zpeti wrote:
| When you setup a facebook ad, you literally say to them: spend
| $100 per day.
|
| Then Facebook has a 6 hour outage. Facebook can then show more
| ads to users per time on Facebook, to get to the $100 per day. Or
| it can only spend $75 that day.
|
| I imagine some advertisers will prefer the first option, some the
| second. Facebook's machine learning algorithms will do something.
|
| But I don't see the massively malicious intent here. Most likely
| this isn't even a human decision. The algorithms just know then
| have to spend $100 per day.
|
| Fine, if there really are 50% less conversions, that's an issue,
| but frankly 6 hours won't really matter.
| roland35 wrote:
| I think it's also 6 prime hours of the day too - if it was down
| between 12-6am I'm sure that wouldn't have been nearly a big of
| a problem (in the US at least)
| ctvo wrote:
| > _Fine, if there really are 50% less conversions, that 's an
| issue, but frankly 6 hours won't really matter._
|
| You buried the lede with things we already know for some
| reason.
|
| Two things:
|
| - It's 6 hours and 60 million dollars to them, which is
| absolutely nothing, but they risked harming their customers
| (advertisers) over it. This was Facebook's screw-up, and now
| they're passing it on to their advertisers. When you view
| advertisers as captured, you worry less about their experience
| and attempt to extract as much value as possible.
|
| - It's systemic. Someone in another thread mentioned there are
| good people at Facebook, and they can't reconcile the behavior
| exposed in internal documents with those good people. This is a
| great example. When your performance is tied to metrics like
| advertiser spend, even when you had the largest outage in your
| recent history, you'll immediately hop on afterwards to direct
| your team to try and extract the most money out of advertisers
| possible to make up for it. These individual incentives add up
| to form the predatory company that we see externally.
| auggierose wrote:
| If you say 60 million is absolutely nothing, then it is also
| clear that no ethics whatsoever will survive unsupervised in
| that kind of climate. No matter how good intentions initially
| were.
| stickfigure wrote:
| I think it's a bit too early to break out the outrage cannon.
| This is just an automated system. They're probably still
| putting out the fires and assessing damage. It will be some
| time before somebody can assess the data and figure out what
| "the right thing" for customers is.
|
| If you were an ad customer during this period and you feel
| you weren't getting your expected value, ask for a credit?
|
| If you weren't - why are you so upset? Are you just looking
| for some excuse to feel angry at Facebook?
| ctvo wrote:
| > _I think it 's a bit too early to break out the outrage
| cannon. This is just an automated system._
|
| Maybe? I'm not in the ads space. I don't know if there are
| automated systems built in with "you now only have 16 hours
| to display the ads, display them even when they're less
| relevant".
|
| > _If you were an ad customer during this period and you
| feel you weren 't getting your expected value, ask for a
| credit?_
|
| Why do customers need to do this when Facebook messed up,
| and had to learn about this, and look into performance,
| from a source other than Facebook?
|
| > _If you weren 't - why are you so upset? Are you just
| looking for some excuse to feel angry at Facebook?_
|
| Y u mad bro? hasn't worked in quite a while.
| solveit wrote:
| > Why do customers need to do this when Facebook messed
| up, and had to learn about this, and look into
| performance, from a source other than Facebook?
|
| Have you bought anything from anyone ever...?
| kritiko wrote:
| Some advertisers - e.g. large CPG with branding goals - might
| care more about even delivery and spending the budget than
| performance.
|
| That said, it seems wrong to use accelerated delivery for
| anybody using the Facebook pixel for conversion optimization.
| malikfarhan wrote:
| Good job
| danuker wrote:
| Do dealings with unethical companies, get scammed by unethical
| companies.
| Waspdotmk wrote:
| Well everything for the upper hand. They're (fb) are becoming a
| comical villain in this story.
| atkailash wrote:
| I hate this language. They didn't lose money to recover. It's not
| like they dropped their wallet. They simply just didn't get it,
| it was never theirs to lose. This sort of language for businesses
| is ridiculous and seems almost classist, like the money people
| earn somehow belongs to the businesses we spend it on.
|
| I don't say I'm losing millions a day because I'm not CEO of
| Facebook anymore than they lost money by not having a running
| service.
| cbsmith wrote:
| This is just ad networks doing what ad networks do.
| nosedrip wrote:
| DSPs are like dogs if you let them be: they eat all the budget,
| you want them to act like cats and stop eating when they're
| 'full'. If the outage causes budget to be spend in an
| accelerated way, this will probably mean less relevant ad
| placements.
| aleppe7766 wrote:
| This is too stupid to be true. For a 6-hour outage to
| significantly increase the ad frequency (and lower the conversion
| rate) you should pressure the system to recover the outage in a
| day or two; do they really need it? We're not even at the end of
| the month...
| bob229 wrote:
| Facebook is an evil empire
| fairity wrote:
| Reader beware. Don't take unsubstantiated claims (such as this
| article) as fact.
|
| As someone who spends five figures daily on FB, I saw no such
| drop in performance -- nor have other advertisers I've been in
| touch with.
|
| Performance on FB (especially at low volumes) is highly volatile
| on a day-over-day basis. So, at any time, there will always be a
| subset of advertisers who think "CPA's are skyrocketing". And,
| it's easy to draw the conclusion that the pattern is platform-
| wide.
|
| The "accelerated delivery" that Facebook quoted in its response
| only applied to the remainder of the day that the outage took
| place -- not future days as the article suggests.
| colpabar wrote:
| please stop giving them so much money :)
| EastOfTruth wrote:
| Are you getting a discount for this comment?
| cosmie wrote:
| This. Facebook makes available a lot of configurable parameters
| around bidding and budgeting[1].
|
| If you've set a campaign-level budget, Facebook's system paces
| delivery to spread that budget from the start date to the end
| date. It automatically adjusts pacing to fluctuations in
| delivery, this 6 hour outage is just a drastic version of that,
| where there was zero delivery across the board vs. more
| localized fluctuations in consumer behavior that usually impact
| pacing for individual advertisers.
|
| So it has to accelerate delivery for the remainder of the
| campaign to compensate, and since it's doing that for all ads
| with this type of budgeting configuration it's resulting in an
| auction grab for available impressions and temporarily bumping
| up CPMs as a result.
|
| Which isn't necessarily a positive for advertisers, but sounds
| like their system doing what it normally does, and just having
| some unanticipated second order impacts when faced with an
| extreme event (compensating for global lack of delivery for 25%
| of an entire day).
|
| If your budgeting/bidding/optimization configuration doesn't
| require a specific spend within a specific timeframe, you're
| not going to see this sort of acceleration. But you will see
| higher CPMs due to the increased auction activity from _others_
| having their pacing accelerated. And they weren 't collecting
| FB pixel data for 6 hours either, so conversion activity will
| also be underreported and show higher CPAs. But CPA-based
| optimization configurations are still in place and doing what
| they normally do, and frequency caps if you use them are still
| limiting how many times your ad will show to the same person.
| So even those seeing accelerated delivery and not wanting to
| could adjust their ads' settings to avoid it.
|
| > The "accelerated delivery" that Facebook quoted in its
| response only applied to the remainder of the day that the
| outage took place -- not future days as the article suggests.
|
| It does actually impact future days, just to a far lesser
| extent than day-of. Pacing jacked up the day of to attempt to
| compensate for expected pacing that day, but for those that
| didn't achieve it they'll continued seeing accelerated delivery
| beyond that to hit the spend target by end of campaign. Plus
| second order effects as their optimization see-saws around
| until things settle back down.
|
| [1] https://www.facebook.com/business/help/1619591734742116
| mrRandomGuy wrote:
| You spend 5 figures daily on Facebook and didn't notice any
| drop in performance when the site was gone for half the day?
|
| Do you actually need to spend that much..?
| fairity wrote:
| > You didn't notice any drop in performance when the site was
| gone for half the day?
|
| Delivery for the day dropped, but performance as measured
| through CPA (or ROAS) remained stable.
|
| > Do you actually need to spend that much..?
|
| Ultimately, we're trying to maximize profit. So, we advertise
| until the cost per incremental conversion is greater than a
| customer's ltv.
| ffhhj wrote:
| > performance as measured through CPA (or ROAS) remained
| stable
|
| CPA should be affected, seems like FB is giving an
| artificial measurement. Reminds me of the Big Short.
| Reubachi wrote:
| I'm a layman in availability and how your service relies
| upon it,
|
| But how can your engagement from clients be "the same",
| despite half the availability?
|
| Does this imply that all else perfect andavailable,every
| day, you could have a volatile swing of up to 50 percent
| engagement?
|
| If so, that seems really really silly to drop 10k+ on
| daily, if on half of all days you don't NEED the platform
| for half the day...what am I missing?
| jefftk wrote:
| _> how can your engagement from clients be "the same",
| despite half the availability?_
|
| Essentially, it's 'engagement per dollar', not 'total
| engagement'
| [deleted]
| killingtime74 wrote:
| "Half of my advertising is wasted - but no one can tell me
| which half!"
| malshe wrote:
| I hope you realize that your claim is as unsubstantiated as the
| one in the article.
| mohirul wrote:
| nice project
| [deleted]
| habeebtc wrote:
| While shady on Facebook's part, it does match the general
| shadiness of Facebook ads.
|
| It is legit hard to find ads which are not a scam in some way.
| moooo99 wrote:
| I mean what is a shady about the dropshipping store trying to
| sell you a cheap imported product for a 400% markup or the guru
| with the rented Lamborghini who is trying to sell you on his
| course on how to 10000x your money by trading forex? /s
|
| I know the example mentioned is facebook, but I feel like a
| similar development is going on with other ad networks as well.
| Even on YouTube around 40-50% of all ads I get are by some guy
| trying to sell me on his dropshipping, forex trading, crypto or
| tax evasion course.
| Ziehm99 wrote:
| Es una buena alternativa para evitar que los anunciantes se
| aprovechen de generar dinero ilicito.
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