• by Gavin O'Malley , Staff Writer @mp_gavin, November 4, 2016

This week, Facebook estimated that U.S. advertising grew by 62%, year-over-year. Pivotal Research Group, however, puts the figure at about 50%.

What explains the difference?

“We think the meaning behind the gap is open to interpretation, but indicates that there is an acceleration of spending by entities based outside of the United States targeting consumers inside of it,” Brian Wieser, a senior analyst at Pivotal, explains in a new note to investors.

Regardless, Wieser believes that investors should be more focused on the growth rate determined by advertisers’ geographic location.

“We think that for most advertisers a geographic home base is more likely to drive an advertising budgeting than the geography of consumers who may be reached by an ad,” he explains. 

More broadly, assessing the “correct” growth rates for Facebook’s domestic and international operations are important because of what those growth rates suggest about the company’s sources of growth, the share of the digital ad market that it is capturing, and because of the implied comparable growth rates that Facebook faces in subsequent periods, according to Wieser.

Looking ahead to the fourth quarter, “We can see that Facebook faces a difficult comparable in the U.S.,” Wieser notes.

Still, the social giant is likely to capture a greater share of the domestic ad market this coming quarter (17.8%), compared to the fourth quarter of 2015 (13.5%), according to Pivotal’s calculations.

Why?

Wieser and his colleagues think the bigger share has less to do with changes in ad load or pricing, and is more likely due to the addition of ads to Instagram, along with efforts to attract smaller advertisers.

That, and “a general increase in ‘share of wallet,’ especially among larger advertisers who are probably increasing their spending at a pace that exceeds Facebook’s overall growth rate,” in Wieser’s estimation.

“Those factors should continue in 2017, albeit at a slower pace,” Wieser suggests.

Mobile ad revenue, of course, now represents the lion’s share (84%) of Facebook’s total ad revenue.