Facebook's New Third-Party Data Restrictions May Be Bittersweet For Advertisers, Consumers

While Mark Zuckerberg may be in the spotlight now, the #DeleteFacebook movement has gathered momentum in 2018. It is important to remember that concerns over the privacy of user data on Facebook are nothing new.

A 2017 Morning Consult poll revealed only 31% of Americans trust Facebook to protect personal data. As far back as 2014, CNBC reported 45% of respondents stated Facebook was the company that most concerns them in regards to personal data.
The user-data Catch 22
However, it is important to note that while users are understandably concerned about how their data is being used by shady third parties, this data has also been traditionally shared with advertisers, and marketers from general brands and services.
The new third-party restrictions will come into force for consumers based in the EU before May and restrict access to any data provided by third-party data vendors, such as Acxiom, Oracle Data Cloud (Datalogix), Epsilon and Experian.
Third-party data bought from data-vendors allows brands "fill in the gaps" and better understand particular target customer demographics. According to a recent eMarketer study, 85% of professionals that purchase third-party data believe it helps them make informed business decisions.
Or in the case of data from Facebook, marketing decisions.
In cutting access to third-party data vendors, Facebook will make it more difficult for brands and marketers to create personalized advertising for different consumer demographics. SMEs and brick-and-mortar businesses, which don’t have large enough sets of proprietary user data and are forced to rely more heavily on third-party data vendors for insights, would be the hardest hit.
In fact, recent studies, per Marketing Dive, show 71% of internet users prefer personalized ads tailored to their interests/shopping habits, with 44% of users stating they are willing to give up information, including name, address or email address in order to get more personalized advertising.
Thus emerges the targeted data Catch 22.
Facebook needs user data, but in light of privacy concerns, it is being forced to shut down this funnel of information to advertisers. Consumers want more personalized and relevant ads, but are wary of sharing the data needed to provide them.
What’s the answer?
The seemingly conflicting goals of privacy and ad personalization have put Facebook and its advertisers in a pinch. But Facebook’s new stance doesn’t necessarily mean an end to useful advertising campaigns.
To regain the public’s trust, and open the door to a more ethical use of user data for advertising purposes, Facebook needs to do a better job of explaining to customers what information marketing companies need; be transparent about it shares with; and convince users why this is to their benefit.
Another option could be to offer paid versions of Facebook, which are entirely free of data sharing, compared to a free version, which is not. During his congressional interrogation, Zuckerberg was careful to mention that a “free version of Facebook would always be available,” leaving the door open to monetization in the future.
Instead of allowing third parties to sneakily tap into accounts via APIs, Farmville and personality quizzes, a system needs to be put in place in which Facebook users are notified that a third-party organization wants to access their data, what data they want, and have the choice to approve or not.
Users will then need to determine the extent of information they are willing to provide in exchange for more personalized ads.
To get back into favor, advertisers need to harness all of the tools available to them, rather than just relying on social data from third-party vendors. This could be by using AI and machine learning to produce ads, which are predicted to perform well, based on a predefined target audience and campaign objectives.
Or, by taking more time to produce highly personalized content and deliver the right message on the right channel at the right time.
Advertisers need to convince social media users that it benefits them to offer access to limited supplies of their personal information. They can do so by creating creative advertising campaigns that spark the imagination of viewers and catch their interest organically.
At the same time, if Facebook wants to remain a household platform used by billions worldwide, it needs to plug all the leaks and take better care of user data in future.



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