Facebook has to build a better case for ad sales. It looks like alliances with big data suppliers like Epsilon, Acxiom, and Datalogix are a key part of the strategy, according to Ad Age. The operative theory is that more precise targeting yields better results and higher customer satisfaction.
The good news is that this will extend classic direct marketing targeting and segmentation to Facebook and provide marketers with all kinds of inventive ways to target campaigns and allocate budgets. The bad news is that crunching big data and matching it anonymously to Facebook profiles will further muddy Facebook’s loosey-goosey reputation as protectors of customer privacy.
In recent moves, Facebook allowed marketers to upload data from brand email lists and loyalty programs and crosstab them against brand followers. This answers the burning question among marketers; “Are we hitting the same guys twice in two separate channels or are we addressing two distinct audience segments?” The answer affects message construction, offers, frequency, and contact strategy.
It may also help answer the chicken or egg dilemma; are customers Facebook fans because they love the brand and seek it out across online experiences? Or does Facebook create interest, awareness, preference, and loyalty among people who haven’t already opted in to the brand?
One of my clients who participated in this “custom audiences” exercise found just 8% overlap between their weekly CRM email list and their Facebook fans. They inferred that they have two disparate audiences with different expectations from the brand. This impacts content strategy and our editorial calendar, plus it begs for further research.
The exercise also triggered client paranoia that Facebook would glom onto our lists and use them for their own purposes as a quid pro quo. Facebook denies this and claims it keeps no record of uploaded matching data. But this worry will persist.
The big data hoopla is not much more than an extension of direct marketing techniques into the online space with the uncertain promise of real-time processing and communication. Traditionally a direct marketer goes to Acxiom or Epsilon or their competitors and appends data to their lists in search of more new or “best” customers. By understanding who owns a home valued above $250K, who has diabetes, who has kids under the age of 12, who has a credit score north of 675, or who owns a gun, campaign narratives and targeted offers can be constructed. Data appending is a hedging tactic to increase the likely number of responders.
Once these variables are appended to a list, by matching either email or postal addresses, marketers create models, build segmented lists by anonymously selecting names that fit the criteria, or use these variables to borrow names from list co-operatives. Appending these variables to Facebook profiles would give Facebook the opportunity to create standing sales channels of moms, sports car enthusiasts, campers or fishermen, Vera Wang buyers, gluten free eaters, or asthma sufferers that could be merchandised to brands again and again. Similarly, for a premium price, Facebook could build a targeted list to suit any particular product or campaign criteria.
Marrying big data to Facebook is a potential bonanza for Facebook’s shareholders and brand marketers. The trick will be how this is sold to Facebook users.
You can hear Zuckerberg falling back on “make the world better” as a rationale for serving up individualized experiences and personalized ad messages. At the same time you can image how creepy or annoying it might be to be bombarded by ads while you’re trying to keep up with friends and family. A backlash against big data and the continuing commercialization of Facebook could kill the goose that laid the golden egg or the skillful application of big data could propel Facebook toward global domination.
Stay tuned. The game is just beginning.
Danny Flamberg, EVP Managing Director of Digital Strategy and CRM at Publicis based in New York, has been building brands and building businesses for more than 30 years.Prior to joining Publicis, he led a successful global consulting group called Booster Rocket, as Managing Partner. Before becoming a consultant, he was Vice President of Global Marketing at SAP, SVP and Managing Director at Digitas in New York and Europe and President of Relationship Marketing at Amiratti Puris Lintas and Lowe Worldwide.