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Fb to reimburse some advertisers for misjudging the effectiveness knowledge

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LONDON – Facebook is paying back some advertisers after one of them is misreported the measures of the likely effectiveness of their ads over the course of a year.

The company's "Conversion Lift" tool suffered a bug that reportedly affected thousands of ads between August 2019 and August 2020.

Facebook fixed the bug in September and is now offering a credit to customers who are "severely affected" by the bug.

Conversion Lift helps brands understand how ads drive sales. It uses a "gold standard" method of linking ads on Facebook platforms, including Instagram, to business performance. This can be seen from an explanation of the tool on the Facebook website.

The free tool displays ads for separate test and control groups, and then compares sales for each group. Based on the results of the study, an advertiser can then decide how much to spend on the social network.

However, it wasn't until this month that advertisers were made aware of the bug, according to a report on the AdExchanger website. Facebook was not immediately available to comment on the issue when CNBC reached out on Thursday.

"While improving our measurement products, we identified a technical problem that affected some conversion lift tests," said a Facebook spokesman in an email to CNBC. "We fixed this and are working with advertisers that have impacted studies." A "small number" of advertisers have been affected and, according to the company, receive "one-time credit".

This isn't the first time Facebook has admitted reporting errors. In September 2016, the average time people spent viewing video ads over a two-year period was overestimated. In 2017, a report found that Facebook claimed to be reaching more people in some US states and cities than official population data in said areas.

Facebook is a major advertising platform, the majority of whose revenue comes from smaller advertisers. Ad revenue hit $ 21.2 billion in the third quarter, up 22% year over year, and vacation demand is expected to boost ad revenue in the fourth quarter.

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Katherine Clark