Facebook Taps Datalogix For Ad Tracking

Facing greater pressure to generate ad revenue, Facebook has tapped data miner Datalogix to track whether users who see product ads on the site end up buying them in stores.

With the tie-up, however, Web watchers think Facebook might be asking for trouble.

Dubbing Datalogix “controversial,” Financial Times writes: “Facebook is gradually wading into new techniques for tracking and using data about users that raise concerns among privacy advocates.”

That said, “the ‘holy grail’ of online measurement has always been tracking to offline sales,” Marketing Land reminds us. “Indeed, 95% of retail sales happen in stores and clicks are often a poor proxy for those in-store activities.”

It’s no surprise, then, that marketers were reportedly clamoring for Facebook to “close the loop” between online purchase intent and offline purchases. "We kept hearing back [from marketers] that we needed to push further and help them do a better job," Brad Smallwood, Facebook's head of measurement and insights, tells FT.

“While such access is great news to marketers, privacy advocates wonder whether using Datalogix violates Facebook’s $9.5 million settlement with the Federal Trade Commission over privacy practices,” Mashable writes. “As part of the deal, Facebook must make it clear to users when the social network shares their information beyond what their privacy settings mandate.”

As such, the partnership “has some privacy advocates worried,” Business Journal writes.

At present, Datalogix has purchasing data from about 70 million U.S. households, which it gathers through loyalty cards and similar programms at more than 1,000 retailers.

By matching email addresses -- or other identifying information associated with those cards against emails or information used to establish Facebook accounts -- Datalogix can track whether consumers eventually buy a product in a store after seeing an ad on Facebook.

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