An analyst recently discerned a potentially key flaw in the numbers that Facebook is using to draw advertisers to its platform, and it could be a big one. Facebook claims that it reaches 41 million people in the US in the key 18-to-24-year-old demographic, but that actually may not be possible if US Census Bureau numbers are to be trusted according to the Census, there are only 31 million people in that age range living in this country. While Census numbers are always estimated at some level and come with a margin of error, the margin here may be too large to be credible in the case of Facebook's claims, as Reuters reports, and the over-estimate extends to the next demo as well, 25- to 34-year-olds.
The observation comes via a senior analyst at Pivotal Research Group, Brian Wieser, who is one of few stock analysts who maintains a "Sell" rating for Facebook stock.
Facebook says that it has 236 million monthly active users in the U.S. and Canada, as Consumerist notes, meaning that, according to the company, two thirds of all Americans and Canadians are active on Facebook every month. It's unclear whether the 41 million figure is supposed to be monthly, weekly, or daily, and Facebook gets cagey in a statement to Reuters trying to justify the discrepancy with the Census. They say their ad reach numbers "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."
Another explanation for the discrepancy could relate to migrants and undocumented people, although the Census tries to count them too as they do on this population clock.
Consumerists points to the proliferation of spambots and people who keep multiple profiles as a more likely source of the discrepancy i.e. the ad reach number is likely inflated by fake or duplicate accounts.
Wieser said in his note on the stock that this may not necessarily deter advertisers when it comes to buying space on Facebook, but the discovery of such a discrepancy "will help traditional TV sellers justify existing budget shares and could restrain Facebook’s growth in video ad sales on the margins."
Then there's the ongoing question of what percent of teenagers are actually, truly active on Facebook versus other social media platforms given that most of their grandparents are now on Facebook. At least as of two years ago, according to a Pew Research poll, 71 percent of teens aged 13 to 17 said they used Facebook regularly, but only 41 percent said it was their most visited site.
Previously: Most Teens Actually Still Using Facebook