Facebook to Craft Ads Using 'Real World' Data

Dennis Faas's picture

Chances are you've never told your Facebook friends which brand of toilet cleaner you use. But if you buy a bottle at the grocery store, you might see an ad for it the next time you log in to Facebook.

The social networking company has announced deals with four companies to supply data to make Facebook advertisements more relevant. This means that, for the first time ever, the ads you see on the site won't be based on your activity on the social networking site.

The four companies collect data in a variety of ways. Two maintain a database of purchasing activities in retail stores.

Another company uses online tracking cookies to monitor visitors to retail websites. And the fourth collates publicly available information, such as court records and other government documents.

Facebook Won't Pass On User Details

The deal will be one-way only: Facebook is paying to acquire the data but won't be passing on any details of what customers do on its site. Facebook believes this means the deal doesn't break any of its terms and conditions and argues that customers should benefit from more relevant advertisements.

Users will be able to opt out of ads based on this data, though doing so won't always be simple and in some cases they'll need to visit the websites of the four data companies involved in the deal.

The deal could be controversial, as two of the firms are currently under investigation by the Federal Trade Commission (FTC). (Source: indiatimes.com)

Initial Facebook Test Leads to Sales Increase

Facebook has already tested the new system. A men's clothing company shared details of customers who had registered on its site, along with a list of clothes they had looked at but not bought.

Facebook then checked the company's mailing list, found people who were also Facebook users, then showed them new adverts for the specific items of clothing they'd been browsing. The result was a 26 per cent rise in sales.

It's also possible that Facebook could use this data to track the effectiveness of its own advertisements.

In addition, if Facebook can use the external data to show that people are more likely to buy a product simply because an advertisement raised their awareness, it may be able to bump up ad rates. (Source: bdtonline.com)

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