Facebook claims a third more users in the US than people who exist

Are we looking at an advertising house of cards?

Realities

How is Facebook able to get away with it? Because advertising is a notoriously low-hit-rate business. For a banner ad for example, a 2 per cent click-through rate (CTR) – meaning two out of every 100 people that see it click on it – would be considered extremely successful. Most CTRs these days average about a quarter of a percent.

However, if Facebook's own figures are wildly off, it could lead to a big re-evaluation by ad-buying companies, and that would have an immediate impact on the company's revenues, profits and stock price.

Facebook is well aware of the problem. It has repeatedly been forced to apologize to advertisers for over-counting its own ad impressions (weird that it never seems to undercount).

In November last year, it noted that the daily and monthly stats it gave about visitors to people's Facebook homepages didn't account for repeat visitors – which is a huge deal for advertisers. It also admitted over-reporting "by 7-8 per cent on average" the number of people who had read articles on the site – for more than a year.

Lies, damn lies and statistics

That comes on top of admitting that its average viewing time stats for videos were over-reported by 60-80 per cent because it simply removed views of less than three seconds from that calculation while retaining the number of people who had viewed the ad.

In response to those debacles, the company launched a new Measurement FYI blog to act as "a new channel for regular information on metrics enhancements."

From Facebook's perspective, its efforts to get more solid user numbers are repeatedly met with objections from privacy advocates and lawmakers. It actually beat an effort by the Belgian government to stop it from tracking non-Facebook users, but the company is constantly being criticized for its efforts to reach into people's lives as a way of gathering ever more data in order to both validate what it thinks it knows about its users, and to come up with new ways to monetize that information.

The company also plays loose and fast with its privacy policies and tracking efforts. It continues to swear blind that it does not use its users' location data without their permission – and yet people continue to report being offered up "friend" recommendations when they have no connection to the person apart from that fact that they live close by. ®

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