Facebook will shut down its Partner Categories that integrate data from third-party providers into its advertising targeting. The feature allowed marketers to combine data from third-party providers with Facebook’s own data to better target audiences.
While that’s a common industry practice, the move will improve people’s privacy, Facebook stated in its terse announcement. It will shut down the program over the next six months. Data providers in the U.S. include Acxiom, Epsilon, Experian, Oracle Data Cloud (formerly DLX), TransUnion and WPP.
A Big Deal? Or it Depends?
ProPublica reporter Julia Angwin called the decision “a big deal,” but the impact will vary between industries and companies, marketing experts say. Some businesses, such as car sellers, benefit greatly from data on consumers’ shopping habits and other consumer history that third-party data provides.
However, Facebook has detailed information on its users that allows advertisers to target audiences based on interests, location and a host of other demographic factors. “The reality is that Facebook’s targeting tools are so powerful,” says Henry Franco, HubSpot’s social campaign strategy associate, “some analysts think this change won’t make much of a difference in overall targeting capabilities.”
Some companies may gather or purchase their own marketing data to augment Facebook’s. Marketers can still upload audience data through Facebook’s custom audience feature. That requires much more work. Smaller businesses may suffer more from the lack of Partner Categories.
Facebook may be taking preemptive action to protect itself from a PR crisis similar to the recent Cambridge Analytica fiasco. An app developer (allegedly) passed data collected on the social network to Cambridge Analytica in violation of Facebook’s terms of service. Facebook may hope to avoid a similar scenario by relying only on its own data.
“If one of these providers were found to have used questionable tactics, or provided non-approved data, Facebook could find itself in more trouble,” observes Andrew Hutchinson at Social Media Today.
The Growing Importance of Privacy & Data Protection
In an effort to mollify critics, Facebook also updated users’ privacy controls, stopped app approvals and conducted forensic audits of previously approved apps. It will also introduce certification tool that requires marketers to certify that email addresses used for ad targeting were obtained with users’ permission, TechCrunch reported. Facebook will also prevent advertisers from sharing of custom audience data across business accounts. The actions highlight the growing emphasis on privacy and data protection.
Other brands are also re-examining and strengthening their privacy protections and data security. Brands that place greater priority on the privacy of customer data will win more appreciation from customers and the media.
The European Union’s General Data Privacy Regulation (GDPR) that greatly strengthens data protection and privacy of European Union citizens provides another incentive to focus on privacy. The GDPR, which goes into effect May 25, applies to all EU citizens regardless of where they live or work and levies severe fines for violations. The GDPR states that people’s data can only be used if they give a company explicit permission.
Marketers often rely on third-party data to improve both advertising and non-paid marketing. But now third-party data almost certainly will face headwinds due to the GDPR, greater privacy concerns in the U.S. and the desire of social platforms to avoid privacy issues.
Bottom Line: The end of Facebook’s Partner Categories may hamper targeting capabilities of some advertisers, but proprietary data and potent targeting will continue to satisfy most brands. The real story is the rising appreciation of privacy and data protection. Companies that take data protection lightly risk the wrath of both their customers and regulators.
William J. Comcowich founded and served as CEO of CyberAlert LLC, the predecessor of Glean.info. He is currently serving as Interim CEO and member of the Board of Directors. Glean.info provides customized media monitoring, media measurement and analytics solutions across all types of traditional and social media.
