In response to recent criticism, Facebook is making significant pivots within its ad platform. Here’s what that means, and how it will affect your marketing performance.
Facebook is currently dominating news cycles and water cooler conversations for all the wrong reasons. With concerns about data privacy and data misuse, the social network giant is tightening the reins on user data. How will these changes impact those who market on the platform?
In short, “bigly.”
As the social media giant reacts to criticism and public demand, the ability of marketers to serve targeted ads to users on Facebook will change significantly. Here’s how (and why it matters).
The Quick Overview
What Is Happening: Facebook is removing the ability to use 3rd party data to create audiences for targeted ads.
Why It Matters: This significantly changes how markets can target people for Facebook ads based on offline and buying behavior data.
Wait, What's Happening?: Let’s look at an example. Currently, you can use partner categories (third party data by a source like Experian) to create a custom audience, such as “women in Ohio who have purchased shoes in the past 60 days.” Under the new rules, you will have to target by interest (i.e., “women who are interested in shoes”)- data that is sourced by Facebook, not a third party.
Who Is Affected: Anyone running ads on Facebook that was utilizing partner categories. Caveat: you may not know you were doing this.
Why It Matters: If you don’t make changes, and the only targeting you're using is from 3rd party sources, your ads will automatically move to broad targeting (i.e., from “women who have purchased shoes in Ohio in the past 60 days” to “women in ohio”). That means you’ll be spending the same money, but seeing far less results.
How Urgent: The update goes into effect September 30th, 2018.
What Should I Do Now: What does this mean for stuff I already have running? What about new ads moving forward?
The Deep Dive
Megan Medeiros and Samuel Johnson (both Managers for the Paid Media Team @ Adept, respectively), weigh in for a deeper look at the news and what it means for marketers.
What's Still in Play, and What Goes Away?
Samuel: Currently, Facebook lets you select data from 3 different sources:
- Data from Facebook, which the company collects from user activity and profiles.
- Data from the advertiser itself, like customer emails they’ve collected on their own.
- Data from third-party services, like Experian, which can collect offline data such as purchasing activity, that Facebook uses to help supplement its own data set. When marketers use this data to target ads on Facebook, the social giant gives some of the ad money from that sale to the data provider.
We still have access to #1 & #2 to target users. It's #3 that's going away.
Facebook has combined its own data with data from third-party services to create what they call “core audiences." Core audiences break down into four categories: location, demographics, interests and behaviors. The first three categories mainly come from Facebook data - information we will still have access to.
The behavior category is what we’ll see shrink most. This category is selecting people based on their prior purchase behaviors, device usage and other activities. Example, previously you could target people who have recently purchased running shoes - this targeting will be gone as it relied on third party data.
How Are Others Responding?
Megan: So far there has been relatively little movement from major brands advertising on Facebook. Only a few (such as Pep Boys, Mozilla, and Commerzbank) have pulled their ads from Facebook. Sonos made news when it pulled its ads from multiple platforms (Facebook, Instagram, Google & Twitter) March 23 - 30, donating an undisclosed amount of money to the RightsCon digital rights conference instead. But these cases all seem like outliers.
Will Facebook Fill the Void of Third Party Data?
Samuel: While third parties have historically had the most shopper and in-market behavioral data, Facebook has been catching up. We can assume Facebook is going to work increasingly harder to fill in the gaps of third-party data to still keep advertisers happy.
Facebook has the ability to track users via Facebook login on other apps (example - using your Facebook login to sign into your Blue Apron account) and the Facebook pixel (a backend plugin that allows websites to track users and measure ad performance).
Using a combination of these, Facebook will aim to provide many of the data insights without using third-party data.
What impact will the EU General Data Protection Regulation (GDPR) have in the US?
Megan: The EU enacted the GDPR which requires consent from EU residents that is explicit, informed, freely given, and verifiable prior to the collection, correlation, and use of their data, and it has no “grandfather” provision allowing for the use of third-party data collected without GDPR-level consent prior to May 2018. Due to this change Facebook will turn off partner categories in the EU on May 25, 2018 - the day the GDPR goes into effect.
Partner categories will turn off for the rest of the world September 30, 2018.
Will Custom Audiences Be Affected?
Samuel: Facebook is also working to add additional security around its custom audiences. Custom audiences are created in one of three ways: brands upload customer data to be matched to users, track users who have been on your site with the Facebook pixel, or track users on your mobile app with the Facebook SDK code.
Custom audiences are a great way for brands to reach their current customer database to get additional sales. To ensure this data is properly attained, Facebook is developing a permissions tool that will require advertisers to certify they have permission to any data collected outside of Facebook that is used to target ads inside Facebook.
What Should Brands Do if They are Currently Running Facebook Ads?
Megan: Tactically, here’s where to start:
- Review any audiences currently running
- Look at the targeting and determine if these audiences will be affected by the change this fall
- Proactively plan any new audience changes that will need to be updated by September 30th, 2018
Strategically, start prioritizing custom audiences more heavily. Custom audiences are your best source of customer data for your company. Through these audiences you can reach your direct customers as well as create lookalike audiences that match the demographics of your buyers.
Should Brands Continue to Advertise on Facebook?
Samuel: Facebook is one of the largest ad platforms on the internet next to Google & Amazon. Right now, users are not leaving Facebook after the data scandal.
Even with these changes, Facebook will still have great targeting capabilities and many users available. The benefits to advertising on Facebook and gaining the additional brand awareness far outweigh the minor loss in targeting abilities.
How Should Brands Move Forward?
Megan: During the beginning phase of Facebook marketing, marketers should spend ample time planning and creating audience targeting. While great creative and strong messaging are key parts of Facebook advertising, the audiences you target are equally important.
Without proper targeting, marketers will likely see poor performance across their campaigns. To increase the likelihood of success, align great creative and messages with a targeted audience.
Marketers must make sure they are reaching the correct audience or the messaging will be useless, resulting in poor performance of campaigns.