In the wake of the recent Cambridge Analytica scandal, Facebook revealed several upcoming adjustments to how it handles user information. Namely, Facebook’s third-party data changes include cutting data brokers out of their ad targeting platform and shutting down its Partner Categories solution.
These changes may lead to enhanced consumer privacy, but how will they impact your advertising campaigns?
What is Cambridge Analytica and why should you care?
Cambridge Analytica is a data analytics company which helps political campaigns hyper-target voters online. In mid-March, allegations that Cambridge Analytica acquired data on 50 million Facebook users without their consent appeared in The Guardian and The New York Times, causing Facebook to suspend Cambridge Analytica from buying ads or accessing Facebook data.
The news instantly pushed Facebook’s data practices into the limelight. In response to public concerns about protecting their personal information, Facebook announced it will stop using data from third-party providers and will limit how much data it makes available to advertisers buying hyper-targeted ads.
Third-party data companies offer purchase data – like brand preferences and shopping habits – to advertisers so they can target their brands to high-interest users and households. For instance, data from a loyalty card program at a grocery store could identify coffee drinkers from tea enthusiasts or even, those who buy Folgers every week from occasional Maxwell House shoppers.
Denying third-party data sources access to Facebook may initially limit some advertisers’ targeting options. For companies that do not track their own customer data, like small businesses or brick-and-mortar retailers, this third-party data has been a go-to resource for audience targeting. However, Facebook’s own data on users is as robust as many third-party providers, so we expect many marketers will simply shift their targeting to Facebook’s audience selection tools.
Why is Facebook shutting down Partner Categories?
Partner Categories launched in 2013 as a way for advertisers to leverage third-party consumer data and more effectively target people that buy their products directly from the Facebook Ads Manager. With Partner Categories, you can target people based on very specific attributes and behaviors, such as home ownership, household income, browsing preferences and product loyalty, similar to the example above.
In an effort to win back consumer trust, Facebook announced plans to phase out Partner Categories by October 1, 2018. However, you can still target using your own first-party customer data via Custom Audiences. In order to give advertisers time to adjust their targeting strategy to Facebook’s third-party data changes, the last day to create new or edit existing Partner Categories campaigns is June 30, and the campaigns can run until September 30, 2018.
While shutting down Partner Categories may seem like a natural response to the situation, it doesn’t actually address the privacy and data issues that came out of the Cambridge Analytica event. The problem with Cambridge Analytica was Facebook shared user data they were not supposed to; it was not about the legitimacy of the third-party data coming into the platform. Shutting down Partner Categories and banning external data from coming into Facebook is a knee-jerk reaction that doesn’t really solve the crux of the problem. So we expect to hear more from Facebook in the coming weeks about their plans to address the deeper data issues.
How can you update your targeting strategy now?
If you relied on Facebook’s third-party data in the past, here are three ways to restructure your targeting to continue to reach customers in the future.
1. PUT YOUR FIRST-PARTY DATA FIRST
Remember, Custom Audiences aren’t affected by Facebook’s recent changes. You can still upload your own customer data into Facebook to use in ad campaigns. This includes data you collect from your CRM, website, loyalty programs, mobile app, etc. If you aren’t already retargeting your customers on Facebook, now is the time to start.
Or if you are short on first-party customer data, you can use Facebook’s audience selection tools to target the people who are right for your products. Using what you know about your customers, like their age, location and interests, you can narrow or broaden your audience based on Facebook’s filters as you like.
2. BUILD LOOK-ALIKE AUDIENCES BASED ON YOUR BEST CUSTOMERS
If you collect data on your customers, prioritize the segmentation of that data so you can map your best buyers for look-alike modeling. Look-alike modeling uses trends in your data to identify like-minded audience segments for more effective prospecting.
This means you can reach new people who have a higher likelihood of being interested in your products because they are just like the audience that already is. For instance, when you can see that your best customers are thrill-seekers who like to travel in the fall, look-alikes take the guesswork out of regional targeting for haunted houses around Halloween.
3. GET CREATIVE WITH YOUR CREATIVE
Showing ads based on an individual’s interests and needs is a must. Build targeting groups based on what products or pages people are visiting on your website. Then deliver Dynamic Ads that capitalize on that information.
Show visitors who recently viewed a product, abandoned their cart, or added something to their wish list ads featuring that specific product and its availability. Not only are these ads more personally relevant, they also expedite the buying process by cutting down on unnecessary searching and clicks in the path to purchase.
If you start exploring new ways to reach customers on social media and preparing for Facebook’s third-party data changes now, you’ll be just fine. But if you need someone to brainstorm with you, we can help you navigate Facebook’s changes and make an ongoing impact in your paid social strategy.
A seasoned marketing pro with years of experience on both agency and client teams, Amanda brings valuable insight and solutions to today’s challenges in strategic communications, digital branding, and social media management. As marketing manager for Goodway Group, Amanda transforms complex digital media topics into easy-to-understand resources to keep all advertisers and marketers at the forefront of understanding the evolving programmatic landscape. Her favorite part of the job? She gets to share our compelling story with new audiences each and every day.