In late 2019, Facebook, in an unprecedented move, announced somewhat acquiescently, that a drastic change was coming to how it shares data with third-party sources. Specifically, allowing you to control and see how your data is used.
What is it?
The feature is called “Off Facebook Activity” and the way it works is that you, as a Facebook user, will have complete transparency on when your data was gathered, by whom and how it will be used. Not only that, but you will be able to ‘decouple’ yourself from the data to anonymise any association between the gathered data and your profile.
When you are ‘decoupled’ from your data, it should be made very clear that your data still exists and can be used by third-party apps and websites, however, can now no longer be used to target you with ads based upon that data.
Why is Facebook doing this?
As stated by Facebook’s own David Baser, Director of Product Management and Erin Egan, Chief Privacy Officer, the decision “could have some impact [on Facebook’s business, but,] giving people control over their data is more important”.
It’s no secret that public trust in Facebook has been severely diminished in the past few years (mainly due to the Cambridge Analytica Scandal), and this move is likely a decision homologated by Zuckerberg and his team to take a hit on advertising revenue as an opportunity cost against repairing public image.
As shown in the chart above. The Cambridge Analytica scandal let to an unprecedented loss in the trust of their users.
Why would Facebook take a potential hit in advertising revenue? Because advertising revenue isn’t their only form of income, however without trust, they will be unable to grow and develop new independent properties.
See the chart above. Facebook is attempting to develop their own brand of crypto-currency, and like most new products, people have to want to use it for it to be a success; and without that, Facebook is in trouble.
How does Facebook use third party data?
The types of data Facebook gathers from third parties includes:
- Purchase history
- What websites are visited
- The particular products viewed on site
- What products get added to cart but not necessarily bought
This data is used to show relevant ads to new audiences and to retarget ads to users that might have previously interacted with a site.
Facebook has actively advised against decoupling your data from third-party data, as using this data helps create “a more tailored and relevant user experience”.
While this may seem like Facebook have put the viability and usefulness of their own platform in jeopardy, Facebook has had a similar feature for a very long time. This feature, albeit far less sophisticated did allow you to hide ads from any advertiser of your choosing.
Garret Johnson, marketing professor of Boston University suggested, “By opening the door to let people opt-out, you do open the door for a lot of people to change things, but the chances of that happening are low”.
Garret has gone on to suggest “only 0.23% of Americans would opt out of behavioural ads”. From this, we can assume that advertising activity will be relatively unaffected. This feature has been rolling out since Q4 2019 and we are yet to see any adverse effects. This should be something anyone within the industry should keep a keen eye on, however, it should not act as a deterrent against investing further in Facebook advertising.
Have some questions about your Facebook advertising activity? Why not reach out and give us a shout!