Facebook and Its Users Are Telling Different Stories

Americans have drastically cut back their use of Facebook, according to a recent Pew Research Center survey. Yet the company’s reported results have held steady. Something is not right.

The survey, conducted in late May and early June, shows that 42 percent of American adult users of Facebook took a break of several weeks or more from checking Facebook over the year; 26 percent deleted the app from their phones; and 54 percent adjusted their privacy settings. These percentages are even higher for users between the ages of 18 and 49: Older people are apparently more conservative and less able to understand Facebook’s convoluted privacy settings.

If this is true, it should have taken a toll both on Facebook’s North American user numbers (absences by 42 percent of the audience must mean fewer daily active users) and on the company’s financial results (more than half of the audience changing the privacy settings should mean less opportunity for accurate ad targeting, a lower efficiency of advertising on Facebook and a revenue fall-off).

Yet Facebook’s reported data don’t reflect any of that. The number of daily active users in North America was stable from June 2017 to June 2018, between 183 million and 185 million. Monthly active users even increased to 241 million in the second quarter of this year from 236 million the year before. Advertising revenue for the U.S. and Canada increased to $6.1 billion in the second quarter of 2018 from $4.4 billion the year before.

The revenue growth can be at least partly explained by Facebook’s growing market share: As its digital advertising duopoly with Google gobbles up more of the pie, advertisers simply have fewer options, even if targeting doesn’t work as well as before. But the stable or growing user numbers just don’t show the tectonic shifts in attention the Pew survey would indicate.

It’s likely that both the poll and the social network bear much of the blame for the apparent discrepancy, but Facebook is the bigger culprit.

Pew took its survey as the Cambridge Analytica scandal over the unauthorized use of millions of people’s social data was unfolding. The media and political climate was so unfavorable to Facebook that I’m sure some people might have wanted to punish the platform with their answers to polls without changing their actual usage pattern. Besides, if compulsive Facebook use is viewed as an addiction, it’s conceivable that people will underreport their use, as they often do with drugs, especially the harder and more stigmatized ones.

I know I would probably downplay the time I spend on Facebook if anyone asked me. I have actually deleted the app and gone from posting several times a day to once every few months, but I still check it more often than I need to.

Still, studies of the self-reporting of drug and alcohol consumption say data collected in this way is, by and large, accurate enough to be usable. Besides, Nielsen’s data corroborate the decline in Facebook’s attention share. The numbers should have reflected at least some reduction of user activity.

That they don’t is almost certainly the result of the company’s continued inability to determine how many accounts belong to actual people and how many are fake. Facebook knows how many “inauthentic” accounts it kills every day, but it cannot say exactly how many remain. In her congressional testimony last week, Chief Operating Officer Sheryl Sandberg said 3 percent to 4 percent of accounts were fake; in terms of monthly active users, there’s a gap of 22 million between these two guestimates, which aren’t based on any specific evidence disclosed by Facebook.

Investors and advertisers should take into account polls such as Pew’s along with Facebook’s user numbers. The combination could be a better indication of true activity levels than the company’s bot-distorted estimates. And even if significant numbers of users are tempted to say they use Facebook less than they actually do, that’s significant information for advertisers. If users feel guilty about logging on to Facebook and don't have a positive experience, they might be less likely to buy things advertised on it.

https://www.bloomberg.com/view/articles/2018-09-10/facebook-s-numbers-and-polls-of-its-users-tell-different-stories?utm_source=yahoo&utm_medium=bd&utm_campaign=headline&cmpId=yhoo.headline&yptr=yahoo

Fakebook's fake numbers about to come to light?

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Even now, Facebook’s increasing ability to vacuum up money from the advertising market is decoupling from its declining ability to target advertising. People are wise to its tricks, feed it less data and spare it less attention. That’s a dangerous situation for the company. Advertising market inertia is strong. Print publications haven’t lost their revenue to the digital platforms overnight, it took years. But duopoly or no duopoly, advertisers will be looking for other opportunities as Facebook’s effectiveness declines.

The social media giant’s current financial performance represents an unjustified advance on the company’s old promises, at least in mature markets such as the U.S. Eventually, the bottom line will start reflecting what the reported user numbers dissimulate today.