• by Mark Walsh  @markfwal, February 27, 2013

Facebook on Wednesday announced it will begin allowing marketers to work with third-party data providers to better target ads through its Custom Audiences tool for retargeting existing customers on the site by uploading their email address or phone numbers.

Datalogix, Epsilon, Acxiom and BlueKai are the outside data providers Facebook will let marketers partner with to run Custom Audiences ads. Businesses that already work with any of these companies can now use the same information they’ve used elsewhere to create campaigns on Facebook.

Facebook said it would also work with the data companies to create pre-defined categories on Facebook such as “soda drinkers” or “auto-intenders.”

Regarding privacy, the social network noted the four new data partners would use the same matching process Custom Audiences already employs to protect personal information exchanged between Facebook, marketers or third parties. Facebook hashes the user information, meaning that it encrypts the data in a secure way that can’t be decrypted to maintain user privacy.

Since the launch of Custom Audiences in September, Facebook and its ad partners have reported promising results with the feature. During the company’s fourth-quarter conference call, for example, Facebook COO Sheryl Sandberg noted that online shopping site JackThreads had a 30% lower customer acquisition cost using Custom Audiences than other platforms and saw six times return on advertising spend.

"We believe the extension of custom audiences to include select third parties will further improve marketers' ability to reach the right customers on Facebook and will lead to more relevant ads. We will be rolling out these enhancements over the coming weeks, starting with marketers in the U.S.," stated a Facebook blog post today.