Amazon apologized to advertisers after its automated advertising system charged them to promote products they couldn’t sell.
The retail giant confirmed that some sellers have been charged for mistargeted ads and said it was actively working to resolve the issue.
first discovered Rob Robinson, a salesman for advanced gaming computers, was the first to raise concerns after discovering he was being paid thousands of dollars to promote products in California, despite not selling in that region. It alleged that the retailer’s automated advertising system continued to serve ads in California even though customers were unable to purchase the merchandise, resulting in no profit between November 2023 and January 2024.
Consequences. Robinson believes the out-of-place ads hurt its “conversion rate,” an important metric for Amazon’s algorithm to decide how popular a product is and where it appears in search results. He noticed his sales going down at the same time as the advertising problem.
Amazon’s response. Initially denying the allegations, the retailer later apologized and offered Robinson a £15,000 refund, despite the mistake costing him around £300,000. Amazon then added that the issues had “affected a small fraction” of sellers and that it would be contacting affected sellers to issue refunds.
What Amazon says. An Amazon spokesperson said Bloomberg:
“We will contact the affected sellers and refund them, and update our processes to ensure these ads are not charged in the future.”
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Why we care If you were affected by this issue, please contact Amazon to see if you can get a refund. But beware, if you are one of the affected advertisers, it seems unlikely that Amazon will fully cover your financial losses.
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