Thursday, September 7, 2017

Report: Facebook Has A Fuzzy Math Problem

Facebook could do with some new friends in data. Its estimated audience doesn’t square with an official U.S. demographic tally. A growing list of counting problems could spell trouble as the $500 billion social network pushes into streaming and other higher-value material.

According to Reuters, Brian Wieser at Pivotal Research clearly has broader concerns about Facebook. He is the only one of 46 analysts following the company who recommends that investors sell the stock, according to ratings culled by Thomson Reuters. He also found that Facebook touts the ability to reach 101 million 18-to-34-year-olds in America. According to the U.S. Census Bureau, there are only 76 million of them.

Some factors might partly explain the yawning gap. Age is self-reported, so groups may not perfectly align with the official national tally from seven years ago. Facebook also might be capturing non-residents, visitors or users holding multiple accounts. What’s more, advertisers aren’t billed according to the estimated figures anyway.


Even so, the bloated numbers fit a troubling pattern. Last September, for example, the company found it had been flubbing calculations on how much time users spent watching videos. It was one of several such mistakes discovered over the past year.

Madison Avenue finds itself in a difficult spot. Media planners and big spenders like Procter & Gamble should have more negotiating power with Facebook. They also could shift some digital dollars to Google. But the company led by Mark Zuckerberg is dominant online and the internet search giant has had its own problems, including putting ads aside questionable material.

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