In light of the recent user data breaches, Facebook has decided to clean up its data practices by limiting the extent to which 3rd party advertisers can access user data on Facebook.
Previously, Facebook allowed advertisers to target users by triangulating data from multiple sources including:
Data collected directly from users’ profile and activity on Facebook.
Data that the 3rd advertiser itself has collected directly from another channel, example, customer email address, location, etc.
Data aggregated or purchased from third-party service providers such as Equifax, Acxiom, etc. Such data include individual PII details along with shopping habits and brand preferences. These 3rd party data can be used on Facebook to supplement and validate 1 & 2. In such cases, Facebook will share revenues of these transactions with the 3rd party that owns or supplied the data.
It is the (#3) data that Facebook is terminating. In other words, data from 3rd party aggregators will no longer be allowed on Facebook platform. This is not such an issue with large enterprise brands who have been generating their own data over time directly from their own customers. It will however impact small businesses who do not have their own data and so have to rely on 3rd party data dealers in other to accurately reach their target audience on Facebook.
It is not yet clear how these changes will shake out as the dust is still settling after the data breach that compromised some 87 million Facebook user data. Because of the user outrage and the potential of increased government regulation, I see 2 possible options unfolding –
Advertisers will just have to readjust their operations, expectations and target audience on Facebook in order to accommodate the loss of 3rd party data.
GDPR will take effect and give users tools and more control over their data. This will likely be the outcome. The benefit are the following –
Facebook users can determine which advertisers get to view the user data
Users can determine the granularity of data available to advertisers.
Users can revoke access to their data at any time if they are no longer pleased with the services or product of the advertiser.