Facebook is shutting down the use of third party data for ad targeting as part of its Cambridge Analytica cleanup
- Facebook is eliminating ad targeting that employs data from third parties.
- The company is looking to show the ad world it's serious about protecting consumers' data.
- However, advertisers will still be able to use Facebook's powerful pool of data to target people.
- This move is unlikely to hurt Facebook's bottom line in the near term. But it could make Facebook less attractive to traditional brands.
Facebook is reigning in how advertisers use data to target people on its platform.
The move to pull back on its ad targeting offerings comes amidst the ongoing controversy over the use of third-party data collected by apps created by the firm Cambridge Analytica.It also comes just weeks before the General Data Protection Regulation (GDPR) takes effect. That European law will potentially put a significant burden on digital platforms and advertisers to obtain clear consent from consumers when using their digital data.
Specifically, the tech giant is shuttering its five-year-old Partner Categories program, which lets advertisers use data from third parties to deliver ads to specific consumers. From Facebook's description of the program:
With Partner Categories you can target people based on offline behaviors people take outside of Facebook, such as owning a home, being in the market for a new truck or being a loyal purchaser of a specific brand or product.
Facebook's Partner Categories offering was the result of a slew of data partnerships with companies such as Axiom and Oracle. These companies pull data from surveys, public records and store loyalty cards, among others.
This kind of ad targeting was useful, but doesn't make up the bulk of Facebook's ad business
While Partner Categories was useful to some brands, the majority of Facebook's advertisers' either employ Facebook's rich set of data on its users or their own data for ad targeting, according to ad buyers. Both of those targeting options are still available.
Generally speaking, Partner Categories appealed to big advertisers that don't have their own consumer data - like say packaged goods advertisers that primarily sell their products in stores, or car brands that sell via dealers.Conversely, brands that sell directly to consumers - companies along the lines of Dollar Shave Club, Casper and Warby Parker - are less likely to need third-party data to run ad campaigns, since they collect their own data from their customers.
Also, it's important to note that while Facebook is taking away the option of using third-party data to target people with ads, marketers will still be able to use data from the Oracles of the world to measure the impact of campaigns.
In other words, a toothpaste brand will no longer be able to use third-party data to send ads to people who are frequent supermarket shoppers. But they will still be able to use data from these third parties to track whether ads on Facebook resulted in people buying their products in stores.
So this move is unlikely to cause Facebook's revenue to plunge overnight. But it could potentially frustrate many big advertisers, many of which are wrestling with how effective Facebook advertising is in the first place.
Plus, Google, along with many of Facebook's wannabe rivals such as Twitter, Snapchat and Pinterest, do offer similar targeting. They all work with Oracle in this fashion, for example.
Facebook is embracing data populism
But Facebook clearly wants to be more conservative with its data. Or at least it wants to look like it is, as pressure mounts on the company to disclose what happened with Cambridge Analytica and the 2016 election.
"We want to let advertisers know that we will be shutting down Partner Categories," said Facebook product marketing director Graham Mudd in a statement. "This product enables third party data providers to offer their targeting directly on Facebook. While this is common industry practice, we believe this step, winding down over the next six months, will help improve people's privacy on Facebook."