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Facebook planned to kick several major third-party data vendors off its ad platform — now those data giants have quietly found a way to stick around

Mark Zuckerberg

  • Facebook has reworked the requirements for its Custom Audiences ad program, requiring brands to agree to data-collection terms before they are able to buy ads.
  • Third-party vendors like Acxiom, Oracle, and Epsilon that were booted from the ad program formerly known as Partner Categories in March can continue to work with brands to supply data, but they must work directly with advertisers to suss out data-agreement terms.
  • At the same time, Europe’s GDPR has put new scrutiny on tech companies like Facebook and the new rules downplay Facebook’s data for ad-targeting purposes.

A few months ago, Facebook kicked several major third-party data vendors out of its ad platform, all in the name of protecting consumers.

But quietly those data giants, including Acxiom, Epsilon and Oracle, have found a way back in – that is, if big brands will vouch for them.

The social networking giant has quietly rolled out a new set of rules for how advertisers use data for targeting that squarely puts the onus on brands to make sure that they’re using data responsibly.

Facebook is essentially saying to its big advertisers: fine, if you really want to work with third-party data vendors to target people with ads, you can. But you have to use our existing ad tools to do so. And it’s on you to make sure you have all the consumer consent you need.

Facebook used GDPR as an excuse to push out third-party data firms. But brands can still work with them

In March, Facebook shocked many in the industry when it shut down its Partner Categories program. 

That program allowed advertisers to tap into targeting criteria collected by vendors like Acxiom, Epsilon and Oracle, which feed data into Facebook platform to serve ads to specific groups of consumers.

Much of that data was collected via credit cards, loyalty shopping cards and other mechanisms. And Facebook said given the climate following the rollout of the huge European privacy regulation GDPR that it needed to crack down on the use of third party data.

Vendors like Acxiom felt blindsided, as did many major consumer brands, which rely on this data to track the impact of their ads.

And while that program will formally end in October, brands have a new loophole if they want to work with those firms.

Brands can used data from major third parties, as long as they take full responsibility

A few weeks ago, Facebook announced the launch of a new ad option for Custom Audiences, Facebook’s large ad program that lets brands upload their own sets of data and hash it with Facebook’s own data to create audiences of people for ad targeting.

The changes began rolling out on July 2. Now, Custom Audiences requires advertisers (and notably not data providers) to agree that their data was collected through proper consent by checking a box within Facebook’s ad-buying software before they are allowed to purchase ads.

facebook custom audiences

If brands choose to work with third-party partners like Acxiom or Oracle to provide data, they must hammer out data agreements on their own with the data provider.

Specifically, Facebook is zeroing in on email and phone number data and if it was collected directly or through a data partner. The source of the data will then be viewable to consumers who click on the upper right-hand corner of Facebook ads under “why am I seeing this ad” section.

Facebook needs to clean up data for both advertisers and regulators

In other words, all external data fed into Facebook’s ad system—whether it’s from a first or third party—is owned by advertisers. It may seem like a small tweak but it’s the latest example of how Facebook is policing its ad platform and making its data practices more transparent in the wake of the Cambridge Analytica controversy.

At the same time, the new regulations seemingly loosen up Facebook’s liability for data breaches or lawsuits about its data-based advertising tactics. And with the General Data Protection Regulation now enforced in Europe, Facebook and other tech platforms are under scrutiny from regulators to prove that data was collected correctly through consent.

“Data moves around the internet in ways that would make the average consumers’ stomachs uneasy,” said Matt McGowan, president of email marketing firm Adestra. “Facebook is putting one more layer between them and the data providers.”

Third-party data only serves a portion of Facebook’s more than six million advertisers

Facebook’s new rules essentially treat first party and third-party data the same. Generally, third-party data is only used by big advertisers that don’t have their own insights—like automakers or packaged-goods advertisers. Brands that sell directly to consumers like retailers have their own first-party data that’s used to run ad campaigns.

As McGowan put it, “Third-party data was always overpromised. They often oversold it. Third-party data is often stale, has a lot of errors in it. You could argue that Facebook cut an under-performing product.”

Since Facebook decided to close Partner Categories in March, Arun Kumar, chief data and technology officer at IPG Mediabrands, whose parent company Interpublic Group acquired Acxiom Marketing Solutions for $ 2.3 billion last week, said that he’s seen a noticeable change in how Facebook works with advertisers. Specifically, he sees Facebook becoming a bit more open to reworking its ad tools to give advertisers more flexibility in how they purchase advertising, he said.

“I think there have been changes made by the walled gardens,” he said. “I think that [Facebook] is open to discussing approaches where clients or agencies are able to upload data which is sourced in an ethical fashion.”

He added, “At the end of the day, clients are going to want to have their data get used—whether it’s a third party who is doing it, whoever—many clients have invested a lot of time and money over the last few years in setting up these systems so that their first-party data can be leveraged.”

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