What The Facebook Ad Targeting Changes Mean for Your Business

Facebook’s found itself in some hot water lately.

And consequently, it’s had to make a few adjustments to how it collects and distributes customer data.

This will inevitably have an effect on how marketers use Facebook. But before you panic, read this. I’ll cover what you need to know about the changes and how they may affect your business.

Unless you’ve undergone a news purge as of late, you’ve likely heard Facebook pop up quite a bit.

You may have heard some buzz words thrown about – Russian scandal, Cambridge Analytica, data breach, etc.

You may not, however, know what those things mean and how they’re connected to Facebook, let alone what they have to do with marketing.

The truth is…it’s complicated.  Allow me to explain.

First of All, Why Are Facebook Ad Targeting Options Changing?

The gist is this: Facebook recently confirmed it would be eliminating some ad targeting options from third-party data miners, which means some brands will have to reevaluate their ad strategies.

But let’s back it up even further to explain a little thing called the Cambridge Analytica scandal.

Back in 2013, Facebook launched a feature called Partner Categories. Essentially, this was a partnership that gave Facebook access to data from third-party data miners.

According to Facebook:

“With Partner Categories you can target people based on offline behaviors people take outside of Facebook, such as owning a home, being in the market for a new truck or being a loyal purchaser of a specific brand or product. Partner Categories complement Facebook targeting, and are especially useful for advertisers, particularly those without access to customer data.”

Essentially, this data gave the platform access to detailed information about its users. In turn, Facebook allowed advertisers to target users based on that data.

You’re likely aware that Facebook is known for its incredibly detailed targeting options. Using them, Facebook could offer advertisers details about users jobs, spending and purchasing habits, financial information, courtesy of the Partner Categories feature.

As you can imagine, this was great for business. The general public, however, was less than thrilled.

Though the partnership was announced in 2013, most users were unaware that the platform was using data from commercial brokers. That all changed with the Russian ad scandal.

In 2016, Russia was able to use that data to create divisive ad campaigns.

“We basically have the brightest minds of our tech community here and Russia was able to weaponize your platforms to divide us, to dupe us and to discredit democracy,” said Representative Jackie Spencer.

The unrest was only furthered by the Cambridge Analytica scandal.

These revelations set off a firestorm events that left Mark Zuckerberg testifying before Congress, and many users abandoning the platform for fear of privacy breaches.

Consequently, Facebook was launched into full damage control mode.

Okay, So Which Facebook Ad Targeting Options are Changing?

Just last month, Facebook announced that it will be phasing out the Partner Categories feature:

“We want to let advertisers know that we will be shutting down Partner Categories. This product enables third party data providers to offer their targeting directly on Facebook. While this is common industry practice, we believe this step, winding down over the next six months, will help improve people’s privacy on Facebook.”

This comes after Facebook’s previous removal of the education, employment, field of study and job title targeting features.

Now, access to information about spending habits, home ownership, investments, etc. will be eliminated as well.

Just so we’re clear, Facebook used to get its targeting information from the following places:

• The information you give Facebook (birthday, interests, jobs, location, etc.)
• Advertisers (customer emails, etc.)
• Your interactions with Facebook posts and pages
• Third-party commercial suppliers

The new update will eliminate the last place – third-party suppliers.

So if your strategy relied on information that could only be collected through those third-party suppliers (the aforementioned spending habits, etc.), you have just a few months to rethink your Facebook ad targeting and how it fits into your overall plan.

How the Facebook Ad Targeting Changes Will Affect Your Strategy

I know, the change seems pretty drastic.

But honestly, it’s really a good thing. But before you go holding major strategy meanings and upending your entire social plan, consider this:

Not that much will really change.

Yes, the elimination of third-party seems like it will take away a lot of information. But the truth of it is that Facebook already has so much data on its users that losing the third-party stuff may not be that big of a deal.

Look at it this way: have you ever made a purchase through a game on Facebook, or made a donation through the platform?

Then Facebook may already have your credit card information.

Ever made a comment about a new house you were looking at to someone on the Messenger platform or asked for neighborhood information in a certain area?

Facebook knows that too.

Based on all the information – anything you’ve ever posted, interacted with, or stated – Facebook has built a complex data profile, with a section dedicated explicitly to ad interests.

It’s not a secret. Anyone can download their entire user data (and yes, the results can be creepy. You’ve been warned.)

Based on that data alone, advertisers can build a solid profile by combining various interests, locations, and keywords.

With that in mind, the biggest barrier for advertisers may not be the lack of third-party data, but rather that Facebook now gives users the ability to turn off targeted ads.

Another thing to keep in mind is that along with Facebook’s impressive pool of knowledge on each user, Facebook also reportedly uses AI that allows advertisers to target users based on future behavior.

Invest in Other Ad Platforms

Here’s the simple solution: if you’re worried that Facebook’s ad targeting changes will make major waves for your strategy, just invest those dollars elsewhere.

But, here’s the thing: using third-party data isn’t exclusive to Facebook. Most internet companies (including Google) use the data in their own targeting options. Facebook just took the heat for it.

As of now, there are no clear regulations regarding the transparency of the information gathered and collected by third-party sources. But due to the recent Facebook scandals, these practices may soon be under scrutiny as well.

But until then, advertisers still have access to the information on other platforms.

For example, if income level is a major part of your targeting strategy, you should consider investing more in sites like LinkedIn and Bing, whose users tend to be in a higher income bracket than other platforms.

And of course, Google AdWords continues to be a leader in advertising, and its targeting methods can help compensate for any loss due to Facebook’s removal of third-party data.

Ramp Up Your Own First-Party Data Collection to Beat Facebook Ad Targeting Changes

The ones who likely be hit the hardest by the change are the advertisers that don’t have their own extensive customer data, like smaller businesses, etc.

Facebook targeting offered a way to target to use specific data without the companies having to collect it themselves.

Now, those companies will have to invest a little more time and effort into their own first-party data stores.

Which means using a little creativity. Set up landing pages on your website to collect contact information. Run surveys through email marketing. Ask questions on your social media channels.

This is also a good time to go back to basics. Facebook targeting hasn’t been around forever, so think about how you reached your audience pre-Facebook.

Take a deep look at your target audience and their interests, and find the categories that align on Facebook.

Like I said earlier, Facebook still has a minefield of data to pull from. Take some time going over user reports to find the kinds of categories they use, and determine which best fits your personas.

And if you haven’t already, this is a great opportunity to take advantage of remarketing. It’s been proven to boost ad response by as much as 400%, and is well worth taking full advantage of.

Last – Don’t Panic.

Facebook ad targeting options are changing.

But you can bet they aren’t going anywhere. Currently, the vast majority of Facebook’s revenue comes from advertising.

Which means Facebook has a vested interest in keeping their advertiser’s happy, and you can bet they’ll be doing everything possible to do just that.

I would expect that the platform’s steadily working on ways to compensate for the loss of data, so stay tuned.

And remember, these data sources were never exclusive to Facebook. if your targeting strategy simply can’t survive the loss of that third-party data, you can always choose to contact the sources yourself.

Wrapping Up Facebook Ad Targeting Changes

I’ll say it again: don’t panic.

Facebook is still a powerful tool for connecting advertisers to relevant audiences. It will continue to serve advertisers to its best ability, and most remain cautiously optimistic going forward.

It’s also too soon to know for sure what the lasting effects of the targeting changes will be. A lot of it will rely on Facebook users and their willingness to stick with the platform and consent to be show targeting ads.

So for now, make adjustments as necessary. But don’t abandon ship. Facebook is still a major player in the marketing game, and I expect it still has a few surprises for advertisers up its sleeve.