Facebook targets ads based on actual user purchases

The social networking company has tied up with data companies to serve ads

Facebook has launched a program that will target advertisements based on what users have actually purchased, but said that advertisers will not have direct access to information that identifies the user.

"To date, advertisers have been able to show ads to people based on their expressed interests on Facebook," the company said on Wednesday in a blog post. With the introduction of new "partner categories," advertisers can also show ads to users on Facebook "based on the products and brands they buy across both desktop and mobile".

The partner categories at launch include 500 distinct groups, ranging from people who are heavy buyers of children's cereals to people who are likely to buy an entry, economy or compact vehicle in the next 180 days. The categories can be fine-tuned to, for example, let a local car dealership show ads to people living near their dealership who are likely in the market for a new car.

Partner categories use data from third parties including Acxiom, Datalogix and Epsilon. These companies collect data from a large number of user purchases both online and offline. Datalogix, for example, claims to have data on almost every US. household and more than US$1 trillion in consumer transactions.

No personal information is shared between Facebook, third parties or advertisers, Facebook said. "Partner categories work the same way all targeting on Facebook works. The advertiser only knows the size of the audience and can't access any information about individuals included in a category," Facebook added.

The company's revenue from advertising was US$1.33 billion in the fourth quarter of last year, which was 84 per cent of total revenue for the quarter, and a 41 per cent increase from the same quarter in the previous year. The company has been trying to offer new services to advertisers, including recently testing targeted advertisements on users' News Feeds on Facebook, based on their browsing history.

Facebook, which has been frequently under scrutiny for possible invasion of user privacy, emphasised in a separate post that the privacy of users would not be compromised by the new partner categories program. It said it set up the program "in a way that people who use Facebook can understand how this advertising works and have the ability to control it."

When he sees a Facebook advertisement, a user can click on "About this Ad" from a drop-down menu, and identify the company responsible for including him in the audience for the ad. The user can also choose to opt-out from the ad or any ads from the Facebook partner. Partners have also agreed to provide on the "About this Ad" page a comprehensive opt-out of future targeting by that company, not only on one website, but across the Web, Facebook said.

Follow CMO on Twitter: @CMOAustralia or take part in the CMO Australia conversion on LinkedIn: CMO Australia.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Blog Posts

Does your brand need a personality review?

There are five tell-tale signs your brand needs to take a long hard look at itself.

Charlie Rose

Senior Strategy Consultant, Principals

How to create profitable pricing

How do we price goods and services? As business leaders, we have asked ourselves this question since the history of trading.

Lee Naylor

Managing partner, The Leading Edge

Sport and sponsorship: The value of event sponsorship

Australia’s cricketers captured the nation’s attention during their recent run to the semi-final of the ICC Men’s World Cup. While the tournament ultimately ended in defeat, for over a month it provoked a sense of belonging, hope and empowerment for millions of people across Australia. Cricket, and sport in general, has a near-unique ability to empower individuals, irrelevant of their background, demographic or nationality.

Nikhil Arora

Vice-president and managing director, GoDaddy India

I should check these guidelines. I think it's important for me. Thanks for the info!

Juana Morales

IAB releases social media comment moderation guidelines

Read more

I didn't know about that. Thanks!

Jamison Herrmann

Twitter 'recap' helps you catch up with missed tweets

Read more

😂😂😂😂😂😂😂😂

Max Polding

What it takes to turnaround an iconic Australian brand

Read more

I spend a lot of time in my professional life as a provider of marketing solutions trying to persuade customers that CX, UX, UI and Custo...

sketharaman

Gartner VP: Why CMOs and CIOs must band together to make CX a discipline

Read more

I live the best deals at LA Police Gear.

Tyrus Rechs

6 Ways to ramp up Social Media to Your Web Design

Read more

Latest Podcast

More podcasts

Sign in