Facebook inflates users’ advertisement reach on its platform, says Pivotal Research Group Analyst
California/United States, September 6: A Pivotal Research Group Analyst said that Facebook Inc. increases the number of people who can now see the advertisements on its platform. The Pivotal Research Group analyst further said that the Facebook’s advertisement manager claimed that the potential reach is around 41 million : 18- to 24-year olds and 60 million: 25- to 34-year olds in the United States. Whereas the United States census data showed that in 2016, around 31 million people between the ages of 18 and 24, and 45 million in the 25-34 age group.
Brian Wieser, the research analyst said that “While Facebook’s measurement issues won’t necessarily check the advertisers from spending money with Facebook, they would help traditional Television sellers to justify existing budget shares and could restrain Facebook’s growth in video advertisement sales on the margins.” Brian Wieser, maintains a ‘sell’ rating on the stock with a price target of $140 for year-end 2017.
According to media reports from Reuters, Facebook said in a statement to the research note that “The reach estimates are only created just to check how many people in a given area are eligible to see an advertisement a business might run. The reach estimates are not created 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.
(Inputs from Reuters)