Facebook is an advertising behemoth, combining with Google to account for 85 percent of all growth in online advertising. But even the social network isn’t able to reach 25 million more people than the U.S. census lists, according to one skeptical analyst.
Facebook’s ad data caught the eye of Brian Wieser, an analyst with Pivotal Research Group. In a now widely publicized memo that he sent to clients on Tuesday, he noted Facebook’s ad program said the site can reach 41 million 18-to-24 year-olds and 60 million 25-to-34 year olds in the U.S. The red flag for Wieser? The U.S. Census shows there’s only 31 million 18-to-24 year olds and 45 million 25-to-34 year olds in the country — making for a drastic 25 million person discrepancy.
Wieser said this could be an issue for the social network moving forward, just as it starts to establish itself as a destination for original content.
“Conversations with agency executives on this topic indicate to us that the gap between Facebook and census figures is not widely known,” said Wieser in his note. “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.”
But according to Facebook, the gap is simply a misunderstanding.
“Reach estimations are based on a number of factors, including Facebook user behaviors, user demographics, and location data from devices,” a Facebook spokesperson told TheWrap. “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.”
In layman terms: Facebook’s numbers can account for more than simply U.S. citizens — it can also include visitors or even undocumented individuals in the region. But does that really account for the whopping 25 million discrepancy?
The Facebook spokesperson added its ad program is an “estimator and campaign planning tool,” not specifically used to bill its clients. Facebook’s advertising partners may be swayed to use the platform differently, if they misread the data, but they’re not being charged for it.
Another factor that may have contributed to the mixup: Users self-report their age on Facebook, unlike the U.S. Census.
6 Tech Giants Shaking Up News, From Jeff Bezos to Laurene Powell Jobs (Photos)
Tech leaders are increasingly intertwined with the news business. While some want to support old properties, one set out to destroy a new one. Here they are.
Jeff Bezos – Washington Post
The Amazon founder purchased the Washington Post in 2013 for $250 million in cash. President Trump has called the paper the “Amazon Washington Post.”
The Facebook co-founder purchased The New Republic in 2012, becoming executive chairman and publisher. However, he sold the venerable political magazine to Win McCormack in 2016, saying he "underestimated the difficulty of transitioning an old and traditional institution into a digital media company in today’s quickly evolving climate."
The eBay founder is a well-known philanthropist who created First Look Media, a journalism venture behind The Intercept. Inspired by Edward Snowden's leaks. Omidyar teamed up with journalists Glenn Greenwald, Jeremy Scahill and Laura Poitras to launch the website “dedicated to the kind of reporting those disclosures required: fearless, adversarial journalism.”
The PayPal co-founder doesn’t own a news organization, but he makes this list because he essentially ended one -- Gawker -- proving once again the power of an angry billionaire. Thiel secretly bankrolled Hulk Hogan’s sex-tape lawsuit against Gawker Media because he was upset that the website once outed him as gay. Hogan won the defamation lawsuit against the site that sent its parent company into bankruptcy, and Gawker.com is no longer operating.
OK, so Facebook isn’t technically a news organization… yet. However, the company is preparing to launch its much-anticipated lineup of original content later this summer, and there are also signs that it's on the verge of becoming an even bigger media platform.
Campbell Brown, Head of News Partnerships at Facebook, confirmed last week it’s developing a subscription service for publishers willing to post articles directly to Facebook Instant Articles, rather than their native websites.
Tech is increasingly intertwined with news, for better or worse
Tech leaders are increasingly intertwined with the news business. While some want to support old properties, one set out to destroy a new one. Here they are.