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Last year, Facebook introduced Custom Audiences, which enables companies to upload customer or prospect databases and target those individuals on Facebook by matching customer IDs with Facebook IDs, phone numbers or email addresses (subject to privacy protections).

That capability was recently expanded with “Lookalike Audiences,” which enable marketers to find segments that generally match specific Custom Audiences on Facebook.

Today, Facebook further extended the functionality of Custom Audiences by announcing that information from third-party data vendors Datalogix, Epsilon, Acxiom and BlueKai will become incorporated into targeting and segmentation capabilities into Facebook.

This development was first discussed by AdAge last week.

What this means is that selected advertisers (“managed advertisers,” for now) will be able to target market segments offered by Acxiom and the other mentioned providers. This dramatically enhances Facebook’s own targeting capabilities. It also brings targeting capabilities that exist for direct mail and email marketing, for example, into Facebook.

If a car maker or dealer is seeking people categorized as prospective car buyers (“auto intenders”), data from the vendors above can now be used to find these people on Facebook. Facebook explains:

  • Businesses that already work with these select third parties can now use the same information they have used elsewhere to create campaigns on Facebook.
  • We will work with these select third parties to create pre-defined targeting categories on Facebook. Businesses of all sizes will now be able to target categories like “soda drinkers” or “auto-intenders.”

This second bullet is perhaps more significant: there will be new pre-defined audience segments, built using third party data, that marketers will be able to tap on Facebook. They’ll also be able to layer existing Facebook targeting and tools on top of those segments as well.

Facebook offers a couple of case studies:

  • Castle Auto Group, a car dealership in Chicago, saw a 24x return on their ad spend combining Facebook offers with custom audiences to their existing target customers
  • Kingnet, a Hong Kong-based game developer, saw a more than 40% decrease in cost-per-installs of its action role-playing game by using custom audiences

I spoke to Facebook at some length about the privacy issues that are implicated. The company explained that there’s nothing new here that isn’t already happening elsewhere online and offline.

Facebook also told me that it recognizes it’s held to a higher standard (because of its history) than others. Accordingly, it has taken pains to protect privacy and allow users to opt-out of third party audience targeting. Here’s what the company said today about the expansion of Custom Audiences and privacy:

As with our existing targeting tools, the process is designed so that no personal information is exchanged between Facebook and marketers (or the third parties those marketers work with). These select third party partners use hashes of customer or potential customer information to create audience groups on Facebook. (For more on this type of targeting and hashing, see here). When advertisers reach these groups of people with ads, they’ll get back the same anonymous and aggregate ad reporting marketers on Facebook currently receive. As with other Facebook advertising, we don’t share private information about individuals with marketers as a part of this process.

At Facebook we work hard to be transparent about how our advertising works and to give you control over the ads you see. As with other Facebook ads, you can ask Facebook to hide a select ad or ads from a specific advertiser by providing feedback though the drop-down menu in the upper right-hand corner of the ad. In addition, you can choose to remove yourself from these select third party partners’ targeting through the “About this ad” link or from the Help Center.

Privacy advocates will undoubtedly raise concerns and be skeptical. But Facebook seems sincere in its desire to give users ultimate control and choice over this process.

Speaking purely from a marketing perspective, these new enhancements further improve what was already a compelling set of tools and audience targeting capabilities. They will roll out more broadly in the coming months.


by Greg Sterling