Facebook is reviewing its advertising policy amidst the ongoing controversy surrounding the social media platform about the use of third-party data collected by apps and used by firms such as Cambridge Analytica to target specific users. The move comes only a few weeks before the General Data Protection Regulation (GDPR) will come into force in Europe. It is a law designed to give social media users the choice of allowing digital platforms to use their personal data in order to receive accurate ads.
Facebook is specifically revising its Partner Categories program that has been effective for the last five years and allowed advertisers to use data obtained from third parties in order to send ads to the relevant audience.
Facebook described the program as:
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 came thanks to numerous associations with companies like Axiom and Oracle who specialize in pulling data from surveys, public records, store loyalty cards, etc… Whilst being helpful in generating content, it does not represent a major portion of Facebook’s ad business.
Ad buyers report that the Partner Categories program was an effective tool for many brands, however, the larger portion of Facebook’s advertisers’ depended on Facebook’s plentiful user data or their own data to carry out ad targeting and these targeting tools are still operational.
Usually, Partner Categories was useful for big advertisers who did not possess their own pool of customer data. For example, packaged goods advertisers that predominantly sold their products offline or car brands that are sold by brokers.
On the other hand, brands that sell their products directly to customers are unlikely to use third-party data to advertise their products since they possess their own pool of data taken from customers. Such companies include the likes of PepsiCo and Maggi Noodles in India.
However, the policy review will not have huge consequences for third party programmers. In fact, Facebook is only erasing the facility of using those data to target individuals with ads, but marketers can still use the data to measure the effectiveness of their advertising campaigns. For example, a chocolate brand promoting its chocolate bar will not benefit from the facility of using third-party data to send ads to those buying chocolates regularly. But they can still make use of those third party apps to analyze the response of their ads on Facebook such as how many individuals bought their chocolates in stores after seeing their ads.
Facebook is not the only website to provide such strategies to refine customer targeting. Indeed, Google, Snapchat, Twitter and Pinterest also offer the same system of ad targeting to their advertisers. All of them have partnerships with Oracle for instance. But after being under fire these past few weeks for a data breach from Cambridge Analytica that might have had a direct consequence of US’s 2016 Presidential Election, Facebook has opted taking drastic measures.
“We want to let advertisers know that we will be shutting down Partner Categories 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.” said Facebook product marketing director Graham Mudd in a statement.
Since the data breach controversy came into light, Facebook took definitive measures to save face in front of the world and minimize the backlash it resulted such as allowing users to know exactly how their data is being user, and Mark Zuckerberg vowing to appear before the Congress.