Real Exali Damage Event: Comma Error Causes the Cost Of Facebook Advertising To Explode
Placing ads on social media has become a common tool for businesses of all sizes to attract new customers. But what if a tiny mistake causes an advertising campaign’s costs to explode unintentionally? Our experts were confronted with this question when a policyholder approached them with exactly such a damage event.
Advertising Campaign Gets Really Expensive Due To a Typing Error
Working in online marketing requires flexibility, resilience to stress and the ability to keep an eye on a lot of things at once. A freelance online marketing manager was particularly challenged in this respect when he was spontaneously commissioned by his client, a retail chain, to look after the company’s internal Facebook account. The freelancer recounts the event:
When setting the budget, the freelancer made a serious mistake: The retail chain had released 15.000 euros per campaign for the planned advertising measures. When entering the budget, the online marketing manager used commas to separate the decimal place as is usual in Germany (e.g. 15,00 = fifteen euros). However, since Facebook is a US company, the system requires American numerical values. So it would have been correct to use the comma as a thousands separator (15,000). As a result, Facebook interpreted the numbers as 15 million euros instead of the agreed 15.000 euros, and the disaster took its course...
Overstretched Budget For Facebook Advertising - Who Bears the Costs?
Two days passed before the error was noticed and could be corrected. In this short time, Facebook had already invested almost 250.000 euros in the advertising campaign. Faced with this staggering sum, the freelancer decided to contact exali's account management professionals, who immediately escalated the case to the insurer’s claims department. In the first step, he calculated the official amount of damage: After deducting the originally planned budget for the advertising campaign, it amounted to over 230.000 euros. Now an obvious and difficult question arose: Who should bear the costs here?
As Facebook’s legal entity is located in Dublin, the insurer faced particular challenges in clarifying the claim. In order to ensure contact with Facebook and also to be able to carefully check possible mistakes made by the social media platform, the parties involved resorted to the support of Irish correspondent lawyers. The policyholder also found this time nerve-wracking and turbulent:
Hard-Earned Agreement On Overpriced Advertising Campaign
The long negotiations were successful in the end - Facebook Dublin and the client of the freelance online marketing manager agreed on a settlement of around 70.000 euros, which the insurer paid including legal fees of over 15.000 euros. The remaining amount of the damage was left to the retail chain that commissioned the advertising campaign. In the end, the insurer incurred costs of around 85.000 euros for a misinterpreted decimal point. But why did the insurer step into the breach here?
Protection Against Slight And Gross Negligence
Ultimately, the professional error, which was committed with slight or perhaps even gross negligence, lay with the freelancer. With a Professional Indemnity Insurance, however, it makes no difference whether the damage was caused by slight or gross negligence. Only intentional action is excluded. In the present case, the error led to a financial damage (or in insurance terms: financial loss) at the client. Such (pure) financial losses are already included in the Professional Indemnity Insurance via exali in the basic protection. In addition, the “Facebook Ads” field of activity is of course covered by the blanket coverage.
Insured activities in the media sector
The insurance covers claims of compensation due to the activities of a company in the media sector (e.g. as a media agency) or a freelancer under the blanket coverage for the profession, in particular (...) as an online marketing agency, e.g. in the area of affiliate, SEO, SEM, CRO, social media…
Therefore it was clear relatively quickly that the damage that had occurred was covered by the Professional Indemnity Insurance.
Nevertheless, the case naturally gave our policyholder a real fright at first. But this damage event also gave him some insights that could also help other online marketing managers work preventively:
Prepared For All Eventualities
Being a freelancer is demanding, and activities in the media sector in particular require resistance to stress, spontaneity and often enough the ability to multitask. However, despite all efforts, there is an inconsiderable risk that an error will creep into the work. Fortunately, these mishaps don’t necessarily result in such great damage as the comma error in this case, but fines due to an imprint error or even claims for damages can cost you dearly!
Facebook’s standards are also somewhat opaque when it comes to removing unauthorised content - so caution is advised if you run a dedicated page on the social media platform for your own business or that of your customers. In the article, Facebook Business: What content Facebook deletes and what you have to delete yourself you can find out what standards you should set for your online content.
The Professional Indemnity Insurance for Media Professions via exali is at your side for all these risks. The insurer not only pays justified claims from clients or other third parties, but also fends off unfounded claims. So you can always get your work done with peace of mind.
Our customer service experts will be happy to answer any questions you may have - Monday to Friday from 9:00 a.m. to 6:00 p.m. on 0821/80 99 46 - 0 or via our contact form.
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Vivien Gebhardt is an online editor at exali. She creates content on topics that are of interest to self-employed people, freelancers and entrepreneurs. Her specialties are risks in e-commerce, legal topics and claims that have happened to exali insured freelancers.
She has been a freelance copywriter herself since 2021 and therefore knows from experience what the target group is concerned about.