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Facebook’s Data Analytics Problem: Pay No Attention to That Man Behind the Curtain

Both Facebook and data analytics firm Cambridge Analytica have come under intense scrutiny for what some are calling an unethical—or even illegal—use of data from 50 million Facebook user profiles. Cambridge claims they were doing so to make ads more effective. Facebook claims Cambridge violated its policies.

The fallout was loud: Calls for people to delete their Facebook pages to prevent the theft of personal data even saw Elon Musk obliterate Tesla Motors’ page on a dare from a Twitter user. Facebook, in turn, announced it would stop working with suspect third-party data sources that provide information to target consumers online.

The ad world seems unfazed. In fact, of the top 1,000 ad spenders on Facebook, only seven ceased buying ads on the platform following the news.

So, what does it all mean for brands trying to best reach consumers?

For the most part, the types of data Cambridge had access to was not outside the norm of typical digital advertising. Targeting and profiling data only crosses the line once personally identifiable information is used (like your name or Social Security number, for instance).

This isn’t true just for Facebook—Google, Microsoft and thousands of smaller digital players have business models that rely on collecting and then reselling user data for the purposes of better targeting by advertisers.

When it comes to targeting options, Facebook often combines information it obtains from users themselves (pages a user likes, for instance) with information from advertisers (membership status in a loyalty program, for example) and with data obtained from third-party providers.

How important is this third-party data in the targeting matrix? Minimal, at best. Our own research shows that third-party data sources—like the ones Facebook uses—can be highly unreliable. As an advertiser, you need to be able to look below the surface of the data source to understand how meaningful the information truly is, and Facebook has never allowed advertisers to do that. For practical purposes, Facebook is doing away with a targeting option that had very little value to begin with, and seems to be more deflection that substantive change, to stop the pummeling it took on Wall Street in the immediate aftermath of the Cambridge announcement.

Data makes the digital advertising world go ’round. At the end of the day, we consumers do respond better to more personalized and targeted ads. Perhaps, it’s just best we don’t know why those ads seem tailored to us.


Managing Partner


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