Amazon apologizes after its AI advertising system makes costly error

An issue impacting Amazon's automated advertising system led to marketers being charged to promote products they couldn't sell.

Chat with SearchBot

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 misdirected ads, and assured that it was actively working to resolve the issue.

First spotted. Rob Robinson, a seller of advanced gaming computers, was the first to raise concerns after discovering he was being charged thousands of dollars to promote products in California, despite not selling in that region. He alleged that the retailer’s automated advertising system continued to serve ads in California even though customers couldn’t purchase the merchandise, resulting in him making zero profit from November 2023 to January 2024.

Aftermath. Robinson believes that the misplaced ads hurt his “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 that his sales dropped 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 error costing him in the region of £300,000. Amazon then added that the issues had “affected a tiny fraction” of sellers, and that it would be contacting affected sellers to issue refunds.

What Amazon is saying. An Amazon spokesperson told Bloomberg:

  • “We will contact and refund any affected sellers, and are updating our processes to ensure any such ads are not charged going forward.”

Get the daily newsletter search marketers rely on.

Why we care. If you were impacted by this issue, contact Amazon see if you can get a refund. But beware, if you were one of the affected advertisers, it seems unlikely that Amazon will fully cover your financial losses.

Opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.

About the author

Nicola Agius
Nicola Agius was Paid Media Editor of Search Engine Land from 2023-2024. She covered paid media, retail media and more. Prior to this, she was SEO Director at Jungle Creations (2020-2023), overseeing the company's editorial strategy for multiple websites. She has over 15 years of experience in journalism and has previously worked at OK! Magazine (2010-2014), Mail Online (2014-2015), Mirror (2015-2017), Digital Spy (2017-2018) and The Sun (2018-2020). She also previously teamed up with SEO agency Blue Array to co-author Amazon bestselling book Mastering In-House SEO.

Get the must-read newsletter for search marketers.