Facebook says it reaches more Americans than are alive

Facebook claims its ads have the potential to reach more people than recent U.S. census data shows exist, and that’s troublesome for one analyst, who thinks third-party measurement services stand to benefit.

Recently, Pivotal Research Group analyst Brian Wieser was intrigued by a trade publication study in Australia that said Facebook was claiming to reach 1.7 million more 16- to 39-year olds than actually existed in the country, according to Australian census data.

In reproducing the study for the U.S., Wieser said Facebook’s Ads Manager claims it can potentially reach 41 million 18- to 24-year-olds, 60 million 25- to 34-year-olds, and 61 million 35- to 49-year-olds. The problem arises when Wieser pulls up U.S. Census data from a year ago, showing 31 million 18- to 24-year-olds, 45 million 25- to 34-year-olds, and 61 million 35- to 49-year-olds.

The upshot: Where is Facebook getting the extra 25 million 18- to 34-year-olds that the U.S. census did not count?

“Conversations with agency executives on this topic indicate to us that the gap between Facebook and census figures is not widely known,” Wieser said. “While Facebook’s measurement issues won’t necessarily deter advertisers from spending money with Facebook, they will help traditional TV sellers justify existing budget shares and could restrain Facebook’s growth in video ad sales on the margins.”

In August, Facebook launched Watch, a service aimed at featuring original video content in hopes of tapping into TV advertising revenue.

Getty Images

One beneficiary from the numbers confusion could be Nielsen Holdings whose potential audience numbers are much more aligned with U.S. census data.

“We think that awareness of general measurement issues causes larger advertisers to require the use of third-party measurement services, including Nielsen’s DAR and comScore’s vCE, to provide the basis against which Facebook is paid,” Wieser said.

Wieser is one of the very few Facebook bears among analysts. Of 44 analysts with ratings on Facebook, only Wieser and Société Générale’s Simon Baker have sell ratings on the stock, according to FactSet data. Wieser has a hold rating on Nielsen.

In a statement, a Facebook spokeswoman said that its estimates “are based on a number of factors, including Facebook user behaviors, user demographics, location data from devices, and other factors.”

“They are not designed to match population or census estimates,” Facebook said.

Ad…

Read the full article from the Source…

Leave a Reply

Your email address will not be published. Required fields are marked *