I received two different error messages (.xml preset and .json preset displays different messages) from azure media services encoder.

H264MultipleBitrateCustom720p.json

{
  "Version": 1.0,
  "Codecs": [
    {
      "KeyFrameInterval": "00:00:02",
      "H264Layers": [
        {
          "Profile": "Auto",
          "Level": "auto",
          "Bitrate": 1000,
          "MaxBitrate": 1000,
          "BufferWindow": "00:00:05",
          "Width": 640,
          "Height": 360,
          "BFrames": 3,
          "ReferenceFrames": 3,
          "AdaptiveBFrame": true,
          "Type": "H264Layer",
          "FrameRate": "0/1"
        },
        {
          "Profile": "Auto",
          "Level": "auto",
          "Bitrate": 650,
          "MaxBitrate": 650,
          "BufferWindow": "00:00:05",
          "Width": 640,
          "Height": 360,
          "BFrames": 3,
          "ReferenceFrames": 3,
          "AdaptiveBFrame": true,
          "Type": "H264Layer",
          "FrameRate": "0/1"
        },
        {
          "Profile": "Auto",
          "Level": "auto",
          "Bitrate": 400,
          "MaxBitrate": 400,
          "BufferWindow": "00:00:05",
          "Width": 320,
          "Height": 180,
          "BFrames": 3,
          "ReferenceFrames": 3,
          "AdaptiveBFrame": true,
          "Type": "H264Layer",
          "FrameRate": "0/1"
        }
      ],
      "Type": "H264Video"
    },
    {
      "Profile": "AACLC",
      "Channels": 2,
      "SamplingRate": 48000,
      "Bitrate": 128,
      "Type": "AACAudio"
    }
  ],
  "Outputs": [
    {
      "FileName": "{Basename}_{Width}x{Height}_{VideoBitrate}.mp4",
      "Format": {
        "Type": "MP4Format"
      }
    }
  ]
}

H264MultipleBitrateCustom720p.xml

<?xml version="1.0" encoding="utf-16"?>
<Preset xmlns:xsd="http://www.w3.org/2001/XMLSchema" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" Version="1.0" xmlns="http://www.windowsazure.com/media/encoding/Preset/2014/03">
  <Encoding>
    <H264Video>
      <KeyFrameInterval>00:00:02</KeyFrameInterval>
      <H264Layers>
        <H264Layer>
          <Bitrate>1000</Bitrate>
          <Width>640</Width>
          <Height>360</Height>
          <FrameRate>0/1</FrameRate>
          <Profile>Auto</Profile>
          <Level>auto</Level>
          <BFrames>3</BFrames>
          <ReferenceFrames>3</ReferenceFrames>
          <Slices>0</Slices>
          <AdaptiveBFrame>true</AdaptiveBFrame>
          <EntropyMode>Cabac</EntropyMode>
          <BufferWindow>00:00:05</BufferWindow>
          <MaxBitrate>1000</MaxBitrate>
        </H264Layer>
        <H264Layer>
          <Bitrate>650</Bitrate>
          <Width>640</Width>
          <Height>360</Height>
          <FrameRate>0/1</FrameRate>
          <Profile>Auto</Profile>
          <Level>auto</Level>
          <BFrames>3</BFrames>
          <ReferenceFrames>3</ReferenceFrames>
          <Slices>0</Slices>
          <AdaptiveBFrame>true</AdaptiveBFrame>
          <EntropyMode>Cabac</EntropyMode>
          <BufferWindow>00:00:05</BufferWindow>
          <MaxBitrate>650</MaxBitrate>
        </H264Layer>
        <H264Layer>
          <Bitrate>400</Bitrate>
          <Width>320</Width>
          <Height>180</Height>
          <FrameRate>0/1</FrameRate>
          <Profile>Auto</Profile>
          <Level>auto</Level>
          <BFrames>3</BFrames>
          <ReferenceFrames>3</ReferenceFrames>
          <Slices>0</Slices>
          <AdaptiveBFrame>true</AdaptiveBFrame>
          <EntropyMode>Cabac</EntropyMode>
          <BufferWindow>00:00:05</BufferWindow>
          <MaxBitrate>400</MaxBitrate>
        </H264Layer>
      </H264Layers>
      <Chapters />
    </H264Video>
    <AACAudio>
      <Profile>AACLC</Profile>
      <Channels>2</Channels>
      <SamplingRate>48000</SamplingRate>
      <Bitrate>128</Bitrate>
    </AACAudio>
  </Encoding>
  <Outputs>
    <Output FileName="{Basename}_{Width}x{Height}_{VideoBitrate}.mp4">
      <MP4Format />
    </Output>
  </Outputs>
</Preset>

Program.cs

using Microsoft.WindowsAzure.MediaServices.Client;
using System;
using System.Configuration;
using System.IO;
using System.Threading;

namespace OnDemandEncodingWithMES
{
    class Program
    {
        // Read values from the App.config file
        private static readonly string _mediaServicesAccountName = ConfigurationManager.AppSettings["MediaServicesAccountName"];
        private static readonly string _mediaServicesAccountKey = ConfigurationManager.AppSettings["MediaServicesAccountKey"];
        private static readonly string _mediaFiles = Path.GetFullPath(@"../..\Media");
        private static readonly string _presetFiles = Path.GetFullPath(@"../..\Presets");

        // Field for service context
        private static CloudMediaContext _context = null;
        private static MediaServicesCredentials _cachedCredentials = null;

        static void Main(string[] args)
        {
            try
            {
                _cachedCredentials = new MediaServicesCredentials(_mediaServicesAccountName, _mediaServicesAccountKey);
                _context = new CloudMediaContext(_cachedCredentials);

                Console.WriteLine("Upload video file\n");
                IAsset inputAsset = UploadFile(Path.Combine(_mediaFiles, @"TestClip.mp4"), AssetCreationOptions.None);
                Console.WriteLine("Encode uploaded file\n");
                IAsset encodedAsset = EncodeToAdaptiveBitrateMP4s(inputAsset, AssetCreationOptions.None);
            }
            catch (Exception exception)
            {
                exception = MediaServicesExceptionParser.Parse(exception);
                Console.Error.WriteLine(exception.Message);
            }
            finally
            {
                Console.ReadLine();
            }
        }

        static public IAsset UploadFile(string fileName, AssetCreationOptions options)
        {
            IAsset inputAsset = _context.Assets.CreateFromFile(
                fileName,
                options,
                (af, p) =>
                {
                    Console.WriteLine("Uploading '{0}' - Progress: {1:0.##}%", af.Name, p.Progress);
                });
            Console.WriteLine("Asset {0} created.", inputAsset.Id);
            return inputAsset;
        }

        static public IAsset EncodeToAdaptiveBitrateMP4s(IAsset asset, AssetCreationOptions options)
        {

            /////// XML PRESET FILE

            //// Custom preset settings with XML
            //// ErrorDetail.Message: A transient error has occurred.We apologize for the inconvenience. Please try again.
            //// ErrorDetail.Code: TransientSystem

            string configurationXml = File.ReadAllText(Path.Combine(_presetFiles, @"H264MultipleBitrateCustom720p.xml"));  
            IJob jobXml = _context.Jobs.CreateWithSingleTask(MediaProcessorNames.AzureMediaEncoder,
                    configurationXml,
                    asset,
                    "Test-Video-" + Guid.NewGuid().ToString() + "-Adaptive-Bitrate-MP4",
                    AssetCreationOptions.None);

            Console.WriteLine("Submitting transcoding job using XML preset file\n");

            jobXml.Submit();
            jobXml = jobXml.StartExecutionProgressTask(
                j =>
                {
                    Console.WriteLine("Job state: {0}", j.State);

                    // Error handling
                    if (j.State == JobState.Error)
                    {
                        foreach (var task in jobXml.Tasks)
                        {
                            if (task.ErrorDetails != null)
                            {
                                foreach (var errordetail in task.ErrorDetails)
                                {
                                    Console.WriteLine("ErrorDetail Message:" + errordetail.Message);
                                    Console.WriteLine("ErrorDetail Code:" + errordetail.Code);
                                }
                            }
                        }
                    }

                    Console.WriteLine("Job progress: {0:0.##}%", j.GetOverallProgress());
                },
                CancellationToken.None).Result;

            Console.WriteLine("Transcoding job of XML preset end.");






            /////// JSON PRESET FILE

            //// Custom preset settings with JSON
            //// ErrorDetail.Message: The preset submitted for this Azure Media Encoder Task is invalid
            //// ErrorDetail.Code: ErrorParsingConfiguration

            string configurationJson = File.ReadAllText(Path.Combine(_presetFiles, @"H264MultipleBitrateCustom720p.json"));
            IJob jobJson = _context.Jobs.CreateWithSingleTask(MediaProcessorNames.AzureMediaEncoder,
                    configurationJson,
                    asset,
                    "Test-Video-" + Guid.NewGuid().ToString() + "-Adaptive-Bitrate-MP4",
                    AssetCreationOptions.None);


            Console.WriteLine("\nSubmitting transcoding job using JSON preset file\n");

            jobJson.Submit();
            jobJson = jobJson.StartExecutionProgressTask(
                j =>
                {
                    Console.WriteLine("Job state: {0}", j.State);

                    // Error handling
                    if (j.State == JobState.Error)
                    {
                        foreach (var task in jobJson.Tasks)
                        {
                            if (task.ErrorDetails != null)
                            {
                                foreach (var errordetail in task.ErrorDetails)
                                {
                                    Console.WriteLine("ErrorDetail Message:" + errordetail.Message);
                                    Console.WriteLine("ErrorDetail Code:" + errordetail.Code);
                                }
                            }
                        }
                    }

                    Console.WriteLine("Job progress: {0:0.##}%", j.GetOverallProgress());
                },
                CancellationToken.None).Result;

            Console.WriteLine("Transcoding job of JSON preset end.");




            
            IAsset outputAsset = jobJson.OutputMediaAssets[0];
            return outputAsset;
        }
    }
}

I noticed the difference in error message and thought to draft it so that you can discover and resolve it easily. Here is the output of above code: