Streaming video content is a major growth opportunity for Facebook Inc (Nasdaq: FB) in the years ahead. However, gaining TV advertisers’ trust may be a more difficult task than it seems.
According to a new report from Pivotal Research analyst Brian Wieser, the biggest challenge of cracking the streaming video market may not necessarily be in attracting and engaging viewers. Instead, it may be in accurately measuring audience size.
Last month, Facebook added a new Watch tab to its platform that features original video content produced by Facebook partners. In June, the Wall Street Journal reported that Facebook was in talks with Hollywood studios to produce its own original TV-quality shows and was willing to pay as much as $3 million per episode for content.
Wieser says Facebook’s checkered past when it comes to user metrics may keep advertisers from paying full price for Facebook video ads.
“While we think the company is positioning itself to compete for TV budgets with TV-like content, we think that the large marketers who dominate TV advertising will only do so after applying significant scrutiny to the metrics associated with Facebook campaigns,” Wieser says. “Measurement issues at Facebook have been top of mind for many of those same marketers over the past year given revelations around over-stated average video viewing time, video viewing completions, miscalculations of organic page reach and other data which impacts how budgets are planned.”
Last week, AdNews criticized Facebook after it claimed it reaches a suspiciously large audience of a 16- to 39-year-old Australians. AdNews cited Australia’s most recent census data, which suggests the nation has far fewer total residents in that age group than Facebook’s user count. Wieser says applying Facebook’s user data claims to U.S. census data yields similarly questionable results.
“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 and could restrain Facebook’s growth in video ad sales on the margins,” Wieser says.
Proving the legitimacy of its user metrics might be a headache for Facebook, but it could also be an opportunity for third-party audience measurement companies Nielson Holdings (NLSN) and Comscore. These companies could provide…
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