Advertisers Look Outwards as FB says No to Third-Party Data

Facebook shut down the use of data from third-party data partners like Acxiom, Epsilon and Experian in the wake of the scandal

by Venkata Susmita Biswas
Published - Apr 5, 2018 9:00 AM Updated: Apr 5, 2018 9:00 AM

Advertisers are trying to find alternative platforms for sharp targeted advertising ever since Facebook announced that it will be shutting down its Partner Categories feature last week.

Partner Categories was launched in 2013 and enabled businesses that did not have access to customer data outside of Facebook, to create Custom Audiences on Facebook. As Facebook made changes to the various aspects of its platform, advertisers who worked with third-party data partners like Acxiom, Epsilon and Experian, are beginning to look beyond Facebook for solutions, said digital media buyers.

Discontinuing Partner Categories handicaps advertisers who have become dependent on this feature. “Advertisers are asking us to figure out the alternatives and find other platforms for targeted advertising,” said Gopa Kumar, Executive Vice President, Isobar.

Depending on Facebook alone would lead to broad advertising, rather than the kind of personalised and customised advertising that brands are looking for. "Since conventional Facebook ad targeting is aligned with the original ethos of Facebook's consumer privacy and experience as a key approach, it may not be nuanced enough for an aggressive and invasive targeting approach," said Anil K Nair - Managing Partner, L&K Saatchi & Saatchi.

According to Sanjay Mehta, Jt CEO, Mirum India, it is advertisers seeking a niche audience, who will be severely hit because of this move. “For example, if a car maker is looking to promote an SUV, they may look out for platforms, for example - gaming apps, which will offer sharper targeting than Facebook where the carmaker can only achieve broad targeting of a person looking for any four-wheeler, not necessarily an SUV,” he said.

Anil said that e-commerce brands that used third-party data to target on Facebook may be most hit because of this sudden shutdown. Noting that the predominant data set is still FB data, he said, "What will be missing is the insidious black ops data mining that was happening without proper consumer consent."
"Meanwhile, brands who desperately need rich targeting without compromising their privacy and security of their consumers will move to other greener pastures" he further added.

Facebook said in a statement that the feature will be shut down over the course of the next six months. Even though Facebook has provided a buffer, advertisers across categories will find this transition hard, according to experts. “For example, advertisers in the CPG category who need nuanced data like household income or buyer behaviour data will be affected,” explained Kumar. He also added that it will not be easy to adapt, and that finding other options or replacing this data with other data points will take time.

Over the years, advertisers have been heavily invested in third-party data providers. “Of late, many advertisers have been using third-party data. Shutting down this feature will restrict advertisers and sharp targeting will not be possible anymore,” said Kumar. A media buyer who did not wish to be named said that “Advertisers will now have to look at collecting data and developing a database of their consumers.”

When Facebook launched Partner Categories, it promoted the feature as the apt solution for businesses without data on their consumers. Advertisers could “Refine targeting based on information such as offline demographic and behavioural information like homeownership or purchase history,” a Facebook statement had said.

Now, battered by concerns of privacy and data breaches, Facebook is plugging all possible avenues for leaks. Facebook is tightening all the screws to regain the trust of its users and secure the data and privacy of its users. The social media giant in a statement said, “While this is common industry practice, we believe this step, winding down will help improve people’s privacy on Facebook.”

Frequent changes to the Facebook platform have irked advertisers and agencies alike in the past. They find that adapting to these changes to be a task. “Advertisers are cautious about the changes that Facebook is announcing,” said one media buyer, adding that these changes could drive advertisers to look for other platforms to advertise in addition to the tech giants Facebook and Google.

In addition, this will make Facebook’s walled-garden more restricted for advertisers. “I see this as Facebook trying to control and be more restrictive with advertisers. We keep on talking about Facebook being a walled-garden and that is being reinforced with this move,” said Kumar.

Not all is Lost

Sudhir Nair, Managing Director – Digital, Omnicom Media Group, allayed some fears of advertisers. He said that the Facebook environment may still provide sufficient data for targeted advertising on the platform, minus the extra layer of validation from third-party data providers.

“Between the data that Facebook has on its users and the data that it has collected on users over the years based on their interactions with brands, Facebook is still equipped to aid advertisers,” said Mehta.

Going forward, Anil felt that Facebook will work with a more balanced approach which allows for permission-based targeting which then opens ways for effectiveness coupled with ethics.

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