Facebook is Shutting Down the Use of Third-Party Data and Here’s What To Do About It
In the wake of the Cambridge Analytica scandal, Facebook announced changes to how much data apps can request from users and new tools to ensure people have more control over their information on Facebook. To further improve consumer privacy, Facebook has notified advertisers that they will be shutting down Partner Categories, their targeting solution that enables third-party data providers to offer their data directly on Facebook.
The third-party data shutdown will take place over the next six months to give advertisers time to adapt and update their targeting. The timeline, which was created to comply with the upcoming General Data Protection Regulation in the European Union, is as follows:
- May 10: After this date, you will no longer be able to create or edit campaign using Partner Categories built on audiences from the UK, Germany and France; however, they will be allowed to continue running until May 24.
- May 25: We will no longer deliver to Partner Categories built on audiences from the UK, Germany and France, and these targeting options will no longer be available for use on our platform. You will be notified to update any targeting containing impacted Partner Categories before this date.
- June 30: This is the last day for creating new or editing existing campaigns using non-EU Partner Categories. They will be allowed to run until September 30.
- October 1: All other Partner Categories will no longer be available as targeting options on our platform and we will stop delivering against these audiences. You will be notified to update your targeting by this date.
Partner Categories and How They Are Used
Partner Categories launched back in 2013 as a partnership between Facebook and major data providers: Datalogix, Epsilon, Acxiom and Oracle’s BlueKai. It launched to help solve Facebook’s biggest struggle at the time and prove to advertisers that their ads are an effective way to reach exact customers that buy their products. Brands were already utilizing data from these providers to target direct mail, email marketing and other online ads, so it made sense to use the same targeting data on Facebook.
Partner Categories delivered major value for advertisers, especially those that may not have had sufficient first-party data. It gave advertisers access to more than the standard demographic and interest data. Now armed with data on where consumers shop, how they shop, products and brands they purchase, the publications they read, websites they browse, their demographic and psychographic attributes. If you wanted to find career-driven millennials who spend $25k or more on a credit card and are currently in market for a new car, you could.
Here are a few things that advertisers who relied on this partnership need to know to mitigate the impact:
1. Put First-Party Data First
First-party data is king. This is your own data, the data you collect from your CRM, website (pixel), mobile app, etc. First-party data is often thought of as the most valuable data you have because of its quality. It’s data collected from your customers and their interactions with your business. If you are not already leveraging your first-party data, you are basically leaving money on the table.
2. Put a Pixel on It and Retarget
This shift makes the Facebook pixel even more critical. It’s been best practice to install the Facebook pixel on your website in order to create audiences on Facebook for remarketing. For online retailers, this has been critical. It’s now just as important for every business, regardless of industry, to remarket to someone that has indicated interest by a website visit. Seek out and test advertising on other platforms that still leverage third-party data. Driving traffic to your website while utilizing this data on other platforms will fuel your retargeting efforts on Facebook and drive conversions.
3. Choose Your Ad Formats Wisely
The type of ad format and creative you use in your ads is now even more important. Video, canvas, and lead forms all have retargeting capabilities based on user engagement. Creating audiences of people who watched at least 75 percent of a video or who opened your canvas or lead form are just some of the potential options available.
4. Segmentation is Key
Knowing your customer is a must. Segmenting audiences based on their interests and behaviors is essential. Create audiences of people based on what pages they are visiting on your website and how often they visit, then deliver relevant and engaging messaging. You can automate this process by utilizing Dynamic Ads. Analyze your most valuable customers to discover purchase patterns and identify potential upsell/cross-sell opportunities. Don’t waste your money being irrelevant.
5. Use Lookalike Audiences for Scale
Facebook creates lookalike audiences by identifying common qualities of the people in your source audience (customer list, website pixel, etc.). Create lookalike audiences based on your audience segments from above to find new people to whom you’ll introduce your brand or product.
Bringing Direct Buying to the Social Space
Direct buys from premium publishers will no longer only be utilized for broadcast and display campaigns. Advertisers should look to work with premium publishers to execute Facebook campaigns, not only to add relevancy and credibility to content, but primarily to access their first-party data pools.
Partnering with trusted publishers who align with your vertical and support your brand messaging will help create a deep connection between consumers and the promoted product or service. Working with publishers such as Discovery, ABC, Buzzfeed, etc., allows advertisers to ensure their media is being served in the right place at the right time, and most importantly, to the right people.
For example, a home improvement product promoting a custom video through an HGTV social placement is the perfect mix of media, message and audience.
Only time will tell just how much of an effect this will have on advertisers and if they choose to shift advertising budgets elsewhere. Third-party data providers did charge a premium to use their data, so we do not anticipate a rise in CPMs, but the efficacy of ads will remain uncertain. There is also the chance that Facebook brings some of the third-party data in-house and offers it to advertisers.
An important thing to note is Facebook has long collected data from its users. The like button, Facebook login plugin and Facebook pixel have been installed on websites around the globe, so it’s not unreasonable to think that Facebook could replicate a lot of what third-party data partners offered. We believe Facebook will offer new ways to apply their own data to enhance their targeting capabilities.
In the meantime, be sure to incorporate the five strategies above to ensure you’re gathering the best data possible once Facebook no longer allows third-party data.