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Facebook Ban of Third Party Data Causing Marketers to Rethink Advertising Strategies

The combination of the Cambridge Analytica scandal and the European Union’s General Data Protection Regulation (GDPR) has prompted Facebook to ban the use of third-party data when advertising on the company’s social media platform.

The action is causing brands to reassess their strategies for pitching advertisements that target individuals’ specific preferences.

The Cambridge Analytica scandal has garnered attention across the globe. In the U.S., Congress has held lengthily hearings with Facebook founder Mark Zuckerberg, regarding how Cambridge Analytica improperly obtained data on as many as 80 million individuals.

The data was then used in a digital marketing push to promote Donald Trump during the presidential election. In Europe, meanwhile, regulators will start enforcing GDPR next month. The regulation seeks to give citizens of the EU better control over their personal data and it harmonizes regulations within Europe. In many instances, marketers have to obtain individuals’ consent before using their data and individuals can revoke their consent.

Facebook recently announced that as of September 30, advertisers will no longer be able to access data from third-party providers such as Acxiom, Epsilon, Oracle, Experian and TransUnion that cull information from credit card companies, loyalty programs and retailers. Brands have used those firms to supplement their own data.

In a recent blog, digital media firm the Goodway Group is recommending that marketers use other advertising features as an alternative to third-party data. For example, marketers can still update their own customer data into Facebook for use in campaigns. The data can be information from CRM technology, websites, loyalty programs, mobile apps, and other resources.

Facebook’s audience selection tools can also be used. The tools allow marketers to target individuals based on age, location, interests and other factors. In a similar manner, marketers can use Facebook tools that will find “look alike” individuals, or individuals that have similar characteristics to a firm’s existing customers.

For most firms, the biggest challenges resulting from the Facebook change could be measuring the success of campaigns without getting input from third-party data providers, according to a column in Ad Exchanger by Matt McGowan.

Brands that don’t have their own data will likely struggle. But, for firms that already have data, the loss of third-party firms won’t be issue. McGowan maintains that data from third-party firms is often over-priced, dated, and stale. Third-party firms, furthermore, tend to overstate their ability to match campaign messages with the interests of individuals.

The value of third-party firms, however, is in tracking the success of campaigns. The firms, he writes, can track the relationship of customers’ or individuals’ offline behavior with advertising campaigns.

The tracking data is helpful for firms to track their marketing programs' ROI. He believes advertisers may cut back on using Facebook, at least temporarily, and instead increase their advertising through Google, which offers strong targeting capabilities.

Without third-party data, marketers will need to improve the quality of their content in order to lure more individuals to their websites or mobile offerings. Content will need to provide value to readers or viewers of videos rather than simply push product.

Brands will also need to ensure that they provide a customer journey that builds loyalty because certain companies may no longer have the benefit of marketing to a large number of prospects that third-party firms have been providing.

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PMG360 is committed to protecting the privacy of the personal data we collect from our subscribers/agents/customers/exhibitors and sponsors. On May 25th, the European's GDPR policy will be enforced. Nothing is changing about your current settings or how your information is processed, however, we have made a few changes. We have updated our Privacy Policy and Cookie Policy to make it easier for you to understand what information we collect, how and why we collect it.