Facebook is inflating its ad-reach numbers, analyst claims

Facebook’s estimates of how many people it can reach through ads in the United States isn’t adding up for at least one analyst, which could make marketers think twice about buying video ads on the social network.

The tech firm, which has been criticized before for inflating video metrics, 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, according to Pivotal Research, citing Facebook’s ad manager data.

But that’s more than last year’s U.S. Census population estimates of 31 million 18-to-24-year-olds, 45 million 25-to-34-year-olds, and 61 million 35-to-49-year-olds.

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“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,” wrote Brian Wieser, an analyst for Pivotal Research.

The tech firm has been making a stronger push to get more people to watch video on its website. Last month, Facebook announced the debut of a new platform called “Watch” to allow users to discover new shows that their friends are also watching.

Wieser also noted that Australian trade publication AdNews last week discovered a mismatch between Facebook’s ad data and population estimates. Facebook claims it can reach 1.7 million more 15-to-40-year-old users in Australia than the country’s population estimates.

Facebook said in a statement to SiliconBeat that its estimates for ad reach are based on a number of factors, including user behaviors, demographics and location data from devices.

“They 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. We are always working to improve our estimates,” the company said in a statement.

Facebook’s ad reach estimates, for example, also includes non-residents or visitors, which isn’t counted in the Census data. And it relies on users to self-report their ages.

Pivotal Research has a sell rating on Facebook’s stock. The tech firm’s shares dropped by less than 1 percent in the morning, but Facebook stock is currently back up 0.62 percent at $171.77 per share.

Photo by Karen Bleier/AFP/Getty Images


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