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Should advertisers be worried about ad targeting changes at Facebook?

24.09.2018 - by Arlie Adlington

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In August, AdAge published an article called ‘Advertisers say Facebook is dumping data without a net’, in which a number of anonymous agency sources commented on a significant change to Facebook advertising – the closure of ‘partner categories’.

The article said “advertisers are worried”, and described the change as “a casualty of the Cambridge Analytica affair and new regulation”. This is a significant change for advertisers, but we don’t fully agree with the pessimistic sentiment that has surrounded the roll out of this change. In this blog post, we explain the change, how it will impact your campaigns, and give our perspective on what it means for the industry.

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What’s actually changed?

Prior to the removal of partner categories, Facebook let advertisers run campaigns using three data sources – its own user data, first party data owned by the advertisers themselves, and third-party data – from companies like Experian and Oracle Data Cloud. This third-party data was accessed through the partner categories tool. Using all these data sources, advertisers could do things like combine Facebook’s user interest data with third-party data relating to household income, to deliver highly personalised ads. The removal of partner categories means this third-party data is being taken off the platform.

Why is this happening?

One thing we’ve learned about Facebook’s historic use of data is that they didn’t always know exactly what they had or how it was being used – a famous example being the guy who pranked his roommate with ads targeted to an audience consisting of just him. Although trivial on the surface, this was very revealing of the ways Facebook often lacks foresight over the ways its platform might be misused. More recently, Facebook clashed with critics over what counts as ‘sensitive personal data’.

Under ever-increasing scrutiny of how it uses people’s data, and cultural shifts exemplified by the introduction of GDPR in Europe this year, Facebook has closed partner categories to minimise its responsibility for the third-party data used on its platform.

Notably, the Cambridge Analytica scandal didn’t happen because of partner categories. So, Facebook’s decision to remove the tool isn’t a direct consequence of the scandal. Rather, it’s a pre-emptive move from Facebook, to avoid any future scandals that could be lurking with those third-party data providers.

Should advertisers be worried?

We were always going to see changes at Facebook after the Cambridge Analytica scandal broke. Partner categories allowed advertisers to target people using highly personal information at a relatively low cost. In the current climate, it’s not a huge surprise to see Facebook pumping the breaks on that.

Here’s what the change means in very practical terms. Advertisers can continue to run targeted ad campaigns using Facebook data, or combining Facebook data with first party data. Facebook is proactively suggesting alternative segments to target, based on existing campaigns. So, as a starting point, you can try Facebook’s suggestions, and/or you can move over to interest targeting. If you work with an agency, they should already be trialling new campaigns. Advertisers can also buy third party data themselves – from providers such as Experian – and plug this into their campaigns. But it will cost a lot more money than it did before, and it’ll be your responsibility to ensure that data is being used compliantly. For example, if you’re targeting people in Europe, you’ll need to know the data is compliant with GDPR.

AdAge quotes one agency representative saying some brands might be questioning whether to keep advertising on Facebook. Given the plethora of targeting options available on Facebook and its daily active user base of nearly 1.47bn (as of June 2018), significant advertiser drop off seems unlikely in the short term.

We think there’s room for a more optimistic view of this change. Sure, life was easier when we could leave Facebook to worry about the provenance of the data we used in campaigns. But rather than lamenting the loss of a tool which let us keep accountability at arm’s length, we see this as an opportunity for advertisers to ensure their ad campaigns meet a higher standard for how data is handled and deployed.

The best advertisers will take this as a chance to refresh their campaigns – both in terms of the data points they use to target people, and their ad creative.

What should you do next?

Partner categories targeting stopped being available for new campaigns on August 15th, but any campaigns using the data will continue to target users in those segments until October 1st.

In trialling different campaign approaches, advertisers (or their agencies) should carefully measure the impact of these changes on results, to optimise campaigns going forward and assess whether there’s a business case for pursuing the integration of third-party data through external providers. This is also an excellent moment to investigate the first party data you own, and how it could be deployed as part of more sophisticated Facebook campaigns. First party data is often an untapped source for running creative, carefully targeted campaigns (subject to the necessary permissions being in place.

Summary

We think it’s absolutely right that there be ‘causalities’ of the Cambridge Analytica scandal. As an industry, we need to be part of repairing the reputation of the marketing and advertising business, to earn back the trust of the people we’re selling to.

Facebook will be rolling out new ad products; so while this change represents something of a reset in terms of how advertisers use the platform, it’s also just the next evolution in the constantly changing landscape of online advertising.

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