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Facebook ads to target users based on real world purchasing habits

It’s no secret that Facebook already uses the personal information that you’ve entered into your profile to determine which adverts you see when browsing the social network. Basic information like age, gender, marital status and interests is used to compile massive databases of users that are divided into categories and passed on to relevant advertisers so that they can target potential customers.

However, for the first time, Facebook adverts will soon begin to target users based on their purchasing history, and that is not even limited to online purchases. Unveiled last week, ‘Partner Categories’ will link into the databases owned by massive consumer data companies Axciom, DataLogix and Epsilon.

 

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Axciom alone claims to have more than 32 billion data records. These consumer data companies sell personal information to advertisers so that advertisers can approach individuals via telephone, email, SMS or mail. They are said to track all kinds of personal information from web behaviour, financial information to social security numbers and personal addresses.

With Partner Categories, Facebook plans to match its own user database against those of the aforementioned data miners’ to create dossiers on its users, which include their online as well as offline purchasing habits. So users will be placed in categories depending on their spending habits.

For example, Facebook will be able to determine how much money you spend on golf equipment every year, and even observe spending patterns which indicate what time of the year you are most likely to be on the market for a new set of clubs. Using this information, advertisers trying to sell golf equipment can target you directly on Facebook.

Naturally, the announcement received a fair degree of negative feedback. In response, Facebook has been quick to point out that all data will be anonymized on both sides. This means that while advertisers will be able to target specific user groups, they will never actually have access to the identities of the individual users they are advertising to.

Advertisers will only be able to see the size of the groups and the defining features which are relative to their product targeting. At launch, advertisers will have 500 partner categories to choose from. Furthermore, users will be able to see how any why they were targeted by a certain advert, and they will also have the ability to opt out of ads from certain companies, or from partner categories altogether.

Ads accounted for 84% of Facebook’s revenue in 2012, so it should not come as a surprise to learn that the company is looking at ways to build this sort of additional value for advertisers.

 Nic Simmonds – COO, Clockwork Media

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