In the coming months Facebook users may start to see advertisements with an eerie similarity to their spending habits. The social media giant has announced new partnerships with companies that collect a variety of data on people through their purchases.
Now, experts suggest, Facebook is using its Internet dominance
to tailor direct, personal ads on behalf of major companies - a
strategy that has sales teams excited and privacy advocates
concerned.
Chief among Facebook’s new allies is Datalogix, which
purportedly has access to information on more than 100 million
Americans. Datalogix' website states that the company has data on
“almost every US household and more than $1 trillion in consumer
transactions” in fields ranging from college tuition to
over-the-counter medication.
Acxiom, another new partner, scours data from court records,
financial service companies and government documents. Last year The
New York Times reported that both companies were under
investigation by the Federal Trade Commission, which sought to
identify how Acxiom and Datalogix found and used customer
data.
Also inking deals with Facebook were Epsilon, a company that collects transaction data, and BlueKai, a developer of cookies that track Internet users.
Facebook dismissed questions over privacy by explaining that
customers will now have an improved experience on the site thanks
to the personalization, even if they didn’t buy lip balm with the
expectation that an ad would arrive on their news feed days later
for Chap Stick.
“It’s ultimately good for the users,” Gokul Rajaram,
product director for ads at Facebook, told The New York Times.
“They get to see better, more relevant ads from brands and
businesses they care about and that they have a prior relationship
with… There is no information on users that’s being shared that
they haven’t shared already.”
Last year Facebook announced that cookies on other websites
would follow users back to their Facebook profile. So, for example,
if someone was researching new employment an advertisement for job
search sites or adult education programs would appear on their page
later that day.
An individual’s profile will now be linked to their spending
habits through the email and phone number they use when signing up
for store discount and loyalty cards. Ad Age reported that ads will
be delivered when Facebook is able to match the corresponding
numbers, although companies will not be able to access exactly
which customers click on the ads.
The new concept might be a dream for marketers, but concerns
over online privacy may again prove troublesome for Facebook.
Kristine Segrist, a social lead for ad agency MEC, warned of the
potential pitfalls.
“Facebook’s challenge is going to be breaking down the
process in ways that are simple to understand and fostering the
confidence that this powerful data can be handled in a responsible
way,” she told Ad Age.