Even amidst slowing growth, Twitter Inc (NYSE:TWTR) is having to refund advertisers owing to an ad-metric error. Should you sell out of TWTR stock? Or should you buy the dip?
Not long after Facebook Inc (NASDAQ:FB) reported a spate of miscalculations in key metrics, Twitter Inc (NYSE:TWTR) seems to have caught the ‘bug’. Late on 22nd December, Twitter announced that it had discovered technical errors which “affected some video ad campaigns” Unlike in Facebook’s case though, Twitter’s measurement errors will cost the company directly in Dollar terms.
Coming on the back of a long list of recent setbacks, the news comes at possibly the worst time for the micro-blogging site. More so because advertisers allocate sizeable advertising budgets for this time of the year, the holiday season, implying that the monetary impact is likely to be bigger than it would, at other times. And according to Business Insider, the error inflated video ad-metrics by as much as 35% in some cases.
A Costly Bug For Twitter?
According to the announcement by Twitter, the company has already communicated the discrepancy to advertisers. Quoting from the press release, the company said “Once we discovered the issue, we resolved it and communicated the impact to affected partners.” And according to Business Insider, which claims to have been informed by a “person familiar with the matter”, Twitter has even issued refunds to advertisers.
The micro-blogging platform has reportedly refunded advertisers to compensate the over-billing for video campaigns that ran on the platform between November 7 and December 12. Twitter seems confident that the mess up is a one-off glitch. In its press release, Twitter said, “Given this was a technical error, not a policy or definition issue, we are confident it has been resolved.”, referring to the bug in its Android app, which caused the error.
Also Read: One Simple Fix Can Make Twitter Inc Profitable (1)
However, the last thing Twitter needed right now, more so after Facebook’s fiasco, was an error that even slightly questioned the accuracy of its advertising metrics. And if there was anything that could be worse, it would have to be an error that hurt advertisers. The only real positive probably comes in the form of the prompt action that Twitter has taken to reassure advertisers. Even though these refunds will cost the company a piece of its waning advertising revenue, Twitter has made a bold decision that will inspire greater confidence in the management’s integrity, if not in its ad-metrics.
It’s worth noting at this point that Twitter does have its fair share of admirers. Take for instance, Larry Kim, a credible voice on digital advertising, who hails Twitter’s platform as “the best ad platform you’ll find – though ultimately it will depend on what you hope to accomplish.”