Facebook Responds to the Data Privacy Crisis with Changes to Ad Targeting

In our increasingly digitally-driven world, the simple fact is this: if you do virtually anything online, you are leaving a footprint. That footprint contains information about you, the web pages you visit, where, when and what you buy, and your activity on social media. In the age of big data, all of this information is extremely valuable to businesses who want to learn more about their customers and devise more targeted ways to advertise to them.

The inevitability of giving up data online means good business for large data aggregation companies (sometimes known as data “brokers”) such as Acxiom and Experian that collect, package and sell consumer 3rd party data to businesses, advertisers and other intermediary sources. Advertising platforms like Facebook, for example, partner with these companies to provide audience segments based on aggregated 3rd party data. Advertisers can then target their Facebook ads against this data in order to reach a specific audience.

Facebook at the Forefront

When advertising giants like Facebook provide 3rd party data on their advertising platform, they become accountable for the legitimacy and authorization of use of that data. Furthermore, they also have the responsibility of protecting Facebook users’ personal data. This responsibility has come into question recently, especially after Facebook exposed the raw data on up to 87 million profiles to Cambridge Analytica, a political consulting firm.

As controversies like these occupy media headlines and as data aggregation and selling practices become more and more transparent to the public, it’s no surprise that consumers who go online are becoming more concerned about data privacy and the unauthorized use of their personal information. In response to what seems to be growing public mistrust, companies like Facebook are implementing changes, specifically concerning their role in providing 3rd party data for advertising.

Here is what Facebook had to say in email correspondence with its marketing partners:

“We believe both first- and third-party data should be held to the same standard — advertisers must ensure that proper consent has been obtained for the use of the data. We will allow advertisers to use third-party data to create audiences on Facebook; however, we will require all advertisers to represent and warrant that proper consent has been obtained for the use of any data uploaded to create a Custom Audience.”

What exact changes are being made, and how will it affect advertisers?

Elimination of Partner Categories

Starting in May, Facebook will begin to roll back availability of its Partner Categories. Partner Categories are targeting options for advertisers provided by Facebook’s 3rd party data partners — the group of data brokers who collect, package and sell 3rd party data to Facebook as well as other businesses, advertisers and intermediary sources. Partner Categories allow advertisers to target people based on offline behaviors they 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.

In essence, by phasing out Partner Categories as a targeting option, Facebook is removing its accountability as the “middleman” between 3rd party data providers and advertisers.

According to the timeline laid out by Facebook, June 30th will be the last day for creating new or editing existing campaigns using Partner Categories, and by October 1st advertisers worldwide will no longer be able to target against 3rd party data segments provided by Facebook’s data partners.

Addition of Custom Audiences Permission Tool

Despite the elimination of Partner Categories, advertisers will still be able to create Custom Audiences by uploading their own data and cross referencing it against user profiles. However, with the addition of a Custom Audiences Permission tool, advertisers will be given more responsibility for the data they upload for the purposes of targeting. According to Facebook’s director of corporate communications, Elisabeth Diana, the tool will allow advertisers to work with service providers (such as agencies) to manage audiences on their behalf, but only after advertisers represent and warrant that proper consent has been obtained for the use of any information uploaded to to create a Custom Audience.

These are probably just the first of many industry changes we’ll see that are designed to gain back public trust that platforms like Facebook are adhering to data privacy regulations. The exact effect these and other changes will have on advertisers will become more clear as they are implemented. However, it’s apparent that changes being made to Facebook’s advertising platform, in particular, are going to restrict the breadth of targeting options advertisers have gotten used to, and they will need to develop a fallback plan for personalizing online campaigns.

It’s a small price to pay for keeping our data safe. Right?

Click here to find out why security of 1st party data is equally important to that of 3rd party data.