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Facebook’s cut off with third-party data partners: Who stands to lose?

The news of Facebook soon pulling the plug on Partner Data, including third-party data partnerships such as Axciom, Experian, Oracle Data Cloud, Datalogix and others, has caused some stir. Clients across industries are thinking how it might affect them; especially those with a global presence and social media spend in multiple countries around the world.

Traditionally, Facebook enabled advertisers to target audiences based on multiple sets of data, including a mix of its own data, client’s campaign data plus the third-party data. This added another layer of granularity and supplemented the other two sets. Now, with the third-party data no longer in the mix, a change Facebook has made clear is permanent – clients are wondering how their strategy to target the right audiences on the platform will be affected.

Graham Mudd, Facebook’s product marketing director reportedly told the press, “This product [Partner Data] enables third-party data providers to offer their targeting directly on Facebook. While this is common industry practice, we believe this step, winding down over the next six months, will help improve people’s privacy on Facebook.”

The move comes after Facebook copped flak for mishandling data in the Cambridge Analytica case. It is now making a slew of changes to its privacy policy as well.

So what’s the impact?

I believe brands that have been working hard to collect some sort of behavioural data of their own will be less impacted by Facebook’s latest move, as their reliance on external third-party data are reducing over time.

These could be clients working hard to collect first-party data points such as email IDs – and then using Custom Audiences as a targeting mechanism on Facebook to connect the email world and social worlds together. They may even have used Custom Audiences to re-target people based on behavioural data points such as those who saw their campaign on Facebook and visited their website/app.

These clients are moving towards a relatively more deterministic targeting strategy. And to widen reach, they are getting better at using these behaviour-defined target segments as a core to then amplify reach using Lookalike audiences, which I believe will still be quite a strong option.

Again, performance-driven campaigns that employ formats like Lead Ads could also be less affected; as these are more behaviour- driven target segments that Lookalikes can help amplify (just keep monitoring your cost per acquisition though).

I sense advertisers most affected by this change in third-party data policy from Facebook would be those that don’t know their customers through data (first-party or behavioural), for example classic “mass appeal” categories. These categories would have found the third-party data such as income/home ownership/brand of car owned/grocery purchase patterns and other non-Facebook data points quite useful to define sharper segments for targeting, especially compared to say traditional media such as TV. So these clients will be having a bit of a rethink right now.

Moving forward, we may well see these larger advertisers reach out directly to the third-party data sources in future for direct partnerships. And I think we should definitely see all brands work harder to get to know their real customers better themselves, and try to create some data-driven relationships.

So all in all, whatever happens, happens for the best…upwards and onwards!

The writer is Taru Jain, CEO and founder of Future Marketer.

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