Say goodbye to data brokers and hello to a new way of reaching consumers. On March 28, 2018, Facebook announced it is banning third-party data targeting starting Sept. 30. The announcement sent a wave of apprehension through the marketing world. But there is some good news: Removing third-party data targeting creates more of a market correction, not a complete disruption. It might even give marketers better results in the long run.
What It Means
In 2013, Facebook launched its Partner Categories, which marked a milestone in the social media platform's partnership with large-scale data brokers such as BlueKai, Acxiom, and Datalogix. When it was created, Partner Categories was intended to provide advertisers with a way to connect in a meaningful manner with Facebook users, and get their brands in front of fresh, new eyes. The third-party data that has been collected has been used by numerous marketers and advertisers to target their audiences.
Marketers will now need to gain their data and information a different way, which is not necessarily a bad thing.
Self-Identified Data Performs Better
As helpful as third-party data might be, it's not the be-all and end-all of data targeting strategies. In fact, many companies leveraging self-identified data — or first-party data — experience better performance and unmatched power in connecting with their customers. First-party data is highly focused, and pulls information directly from customers using a company's website or apps. That's why many in the industry think first-party data is the way of the future in digital marketing.
Not sure first-party data can be effective? Consider this: A 2015 study conducted by EConsultancy and Signal revealed that out of 300 senior-level marketers, roughly 66 percent believe first-party data provides a better understanding of customers, which also leads to better overall performance. So even though losing Facebook's third-party data targeting might feel like a sucker punch for many marketers, it's an opportunity to shift strategies and boost results.
The Consumer Connection
What does it mean for users? Facebook's move to end third-party data targeting comes closely on the heels of the Cambridge Analytica scandal and a few weeks ahead of General Data Protection Regulation (GDPR), which becomes effective for countries in the European Union on May 25, 2018. This new regulation requires companies to get consumers' consent to collect data, giving consumers much more control over their personal information. That might be the largest impact on consumers.
So with its removal of third-party data, Facebook could be setting a new standard for the industry. This means marketers need to change with it, and continue using data collection strategies that best connect brands with potential customers.