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Facebook's New Custom Audiences, Explained
By: Jessica Cherok
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Facebook announced this week that it was partnering with four data brokering firms to expand their custom audiences tool capabilities. Facebook's statement highlights the benefits users will see in terms of more relevant advertising. What is obviously missing from their announcement are plain-language examples for what this means for the user. And, because we're helpful here at Digital Pivot, we've added in some helpful explanations.

Below is Facebook's announcement. Our comments are in bold.

New Ways to Reach the Right Audience

In September we released our custom audiences tool, which lets marketers reach their current customers with relevant ads on Facebook. Meaning, if a business already knew your email address, they could use that information to specifically show you ads on Facebook. We know that many businesses also work with third party partners to enhance their online and offline marketing in order to show more relevant ads. As in cookies.

Today, we're expanding custom audiences to allow businesses to use Datalogix, Epsilon, Acxiom, and BlueKai to further enhance the ads they run on Facebook.
Businesses can do this in two ways:
  • Businesses that already work with these select third parties can now use the same information they have used elsewhere to create campaigns on Facebook. Basically, this is preferential treatment. The business doesn't need your email anymore, because Datalogix, Epsilon, Acxiom, and BlueKai probably already have some of your info, thus enabling a matchup to your profile on Facebook.
  • We will work with these select third parties to create pre-defined or custom first-party targeting categories on Facebook. Businesses of all sizes will now be able to target categories like "soda drinkers" or "people who browsed for a specific make/model on my website." This goes beyond liking a product on Facebook, and as a result ads show up. This means that your interaction with the company happened elsewhere entirely. To break the example down even more: if you buy from a store that has a loyalty card, information about your purchase is recorded and grouped by these data brokers. From that information they can categorize you several different ways, based off of your buying behavior. That behavior outside of Facebook will now result in ads related to it on Facebook.
For example, an auto dealer may want to customize an offer to people who are looking to buy a new car. To do this today, many businesses work with third parties to better understand how to identify and reach that audience. With today's updates businesses can now do this same thing by showing ads to people on Facebook who may be in the market for a new car. You looked at a car on Willie's Carmart website, but didn't put it in your shopping cart and checkout. Never fear, Willie can now show you ads on Facebook to help convince you to buy.
As with the existing custom audiences tool, these select partners use a privacy and data-protective matching process. This process is specifically designed so that we don’t share private information about individuals with marketers. People will still have the same control over the ads they see on Facebook. They can learn more about the ads they see, give feedback, or opt-out using the controls we provide in the ads themselves or in the Help Center. To learn more visit our Privacy Page. At this point, it's probably not totally unfair to say Facebook's assurances about privacy protections are laughable. Seriously, you may really want to consider opting-out.
We know that more relevant ads are better for people and businesses. Remember the last time you were really emotionally offended by seeing an ad that had nothing to do with you? Exactly. By showing the right ads to the right people, businesses have been able to increase the effectiveness of their Facebook campaigns. For example: Castle Auto Group, a car dealership in Chicago, saw a 24x return on their ad spend combining Facebook offers with custom audiences to their existing target customers. Kingnet, a Hong Kong-based game developer, saw a more than 40% decrease in cost-per-installs of its action role-playing game by using custom audiences. You'll notice the lack of examples where people were 24% happier or 40% better off.

We believe the extension of custom audiences to include select third parties will further improve marketers' ability to reach the right customers on Facebook and will lead to more relevant ads. We will be rolling out these enhancements over the coming weeks, starting with marketers in the U.S.

Well, there you have it. Facebook's changes to how they share your information with third parties now makes a lot of sense. The world of Big Data is big business, and it's really not that surprising that Facebook has made this move. Though, it's worth a wonder as to whether the new high-profile endorsements of DNT by major browsers will impact the whole cookie-related data gathering on which this arrangement hinges.

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About the Author
Jessica Cherok is an advocate for online privacy, campaigning for ethical data practices and the protection of personal privacy.
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