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Facebook Cuts Off Advertisers From Using Data Brokers

Facebook took a pretty significant step Wednesday to take more control over what data its marketers are using to target ads. Facebook announced it is shutting down a “partner categories” system that let third-party data brokers like Acxiom and Oracle’s DataLogix, which would use anonymized data on people like offline purchases supplement Facebook data. This was a significant PR vulnerability for the company, particularly because agencies like the Federal Trade Commission have been critical of data brokers.

It’s tough to tell whether this will mean much for Facebook’s business, although it could create uncertainty for some large advertisers in the short term. For some, ad targeting precision may take a hit, making Facebook ads less valuable. Using data-broker information, advertisers could target people based on whether they were likely first-time homebuyers or had a certain net worth. But the number of advertisers relying on data brokers for this kind of targeting still makes up a relatively small slice of Facebook’s ad revenue, according to a person familiar with the matter. And Facebook still knows a lot about users, without the help of data brokers, because people use Facebook Connect for logging into apps or tracking pixels that can collect similar data over which the social network has more control.

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