Facebook claims to reach more people than live in the US for some age groups, analyst alleges
Facebook inflates its ad reach by millions, analyst
claims
Facebook claims to reach more people than live in the US
for some age groups, analyst alleges
September 6, 2017 Published 13 Hours Ago | Updated 3 Hours Ago
Facebook inflates the number of people who can see the
advertisements on its platform, a Pivotal Research Group analyst said in a
note.
Facebook's Ads Manager claims a potential reach of 41
million 18 to 24-year olds and 60 million 25 to 34-year olds in the United
States, whereas U.S. census data shows that last year there were a total of 31
million people between the ages of 18 and 24, and 45 million in the 25-34 age
group, the analyst 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," said research analyst
Brian Wieser, who maintains a "sell" rating on the stock with a price
target of $140 for year-end 2017.
Facebook said, "They (reach estimates) are designed
to estimate how many people in a given area are eligible to see an ad a
business might run. They are not designed to match population or census
estimates."
The estimations are based on several factors such as user
behavior, user demographics and location data from devices, Facebook said in a
statement, in response to the research note.
In September last year, Facebook told advertisers that
the average time users spent viewing online ads was artificially inflated,
because it was only counting videos that were watched for at least three
seconds, its benchmark for a "view."
In November 2016, Facebook launched a new blog on its
website called Metrics FYI, to share updates and corrections for its data.
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