Facebook under scrutiny for inflated ad reach in US

With 'Watch,' Facebook challenges YouTube
With 'Watch,' Facebook challenges YouTube

Facebook is in the spotlight for potentially inflating the size of its reach in the U.S. to advertisers.

Facebook (FB) has claimed that its advertising platform can reach millions more young adults in the U.S. than are estimated to actually live in the country, according to Brian Wieser, an analyst with Pivotal Research Group.

Facebook's Ads Manager claims to have a potential reach of 41 million people in the U.S. between the ages of 18-24, according to Wieser's investor note released Tuesday. But the U.S. Census Bureau estimates there were only 31 million people in that age range last year.

Likewise, Weiser found Facebook claimed advertisers could potentially reach 60 million 25-34 year-olds in the U.S., substantially more than the census estimate of 45 million residents in that age group.

Facebook says its reach estimates factor in location data, which could include non-residents visiting the U.S., and age information, which is self-reported by the user and may not match government data.

Related: Facebook's global fight against fake news

"They are designed to estimate how many people in a given area are eligible to see an ad a business might run," a Facebook spokesperson said in a statement provided to CNN Tech. "They are not designed to match population or census estimates."

The discrepancy between Facebook's numbers and census estimates risks further unnerving marketers after the company faced a series of issues with its ad metrics.

Last year, Facebook admitted to miscalculating the average time users spend watching videos and the number of completed video views. It also "over-reported" average time spent on Instant Articles, the company said.

In May, the social network offered refunds after a "bug" caused some advertisers to be billed incorrectly when users clicked on videos in a carousel ad unit.

"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," Wieser wrote in his investor note.

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