It’s time for another reset: Facebook has acknowledged a significant error in its advertising reporting systems.

This latest issue could prove expensive for the technology company to resolve, particularly as it further damages its credibility regarding accurate self-reporting. (For details on previous inaccuracies in Facebook’s ad metrics, see our coverage from 2016 available here, here, here and here.)

AdExchanger initially reported on the coding mistake within Facebook’s complimentary “conversion lift” tool, noting that it affected numerous advertisers.

Following the discovery of this flaw, the technology company has reportedly offered millions of dollars in credits to some advertisers to account for incorrect calculations of sales generated from ad views – a miscalculation that likely influenced advertising expenditure on its platform.

According to a report in AdAge yesterday, citing sources within the industry, the amount of compensation Facebook is providing varies based on an advertiser’s spending; however, in certain cases, the error has resulted in advertisers receiving coupons valued at tens of millions of dollars.

Reports indicate the problem with the tool remained unresolved for up to 12 months, persisting between August 2019 and August 2020.

The Wall Street Journal states that Facebook recently informed advertisers about the technical issue affecting the calculation of their ad campaign effectiveness, thereby distorting the data used to determine advertising budgets on its platform.

A source at a digital agency explained to the WSJ that the issue particularly impacts specific sectors, such as retail, where marketers have increased spending on Facebook and similar platforms by as much as 5% to 10% this year in an effort to recoup losses experienced during the initial phase of the pandemic.

Another industry source highlighted that the problem extends beyond advertisers using Facebook directly, also affecting the company’s competitors, as the tool’s inaccuracies could influence where marketers allocate their advertising budgets.

Last week, Facebook communicated to AdExchanger that the bug was corrected on September 1st, and that it was “working with advertisers who were affected.”

A company spokesperson subsequently stated: “During improvements to our measurement products, we identified a technical issue that impacted some conversion lift tests. We have resolved this issue and are collaborating with advertisers whose studies were affected.”

Facebook did not respond to inquiries regarding whether some affected advertisers are being offered millions of dollars in ad vouchers to rectify the coding error.

The company did confirm that it is providing one-time credits to advertisers who were “significantly” impacted by the issue with the (free) metric, clarifying that the impact is being assessed on a case-by-case basis, depending on how the tool was utilized.

It also did not confirm the number of advertisers whose studies were affected by the year-long technical problem, stating that the number is small.

While the technology company can continue to manage its own reporting systems for business clients without external scrutiny for the time being, a major upcoming digital services legislative overhaul in the European Union aims to regulate the fairness and transparency of dominant internet platforms upon which other businesses rely for market access and reach.

Under the proposed Digital Services Act and Digital Markets Act, the European Commission has stated that technology companies will be required to make their algorithms available for review by public oversight bodies and will be subject to mandatory transparency regulations. Therefore, time may be running out for Facebook’s self-regulated reporting practices.