Facebook’s removing third-party targeting data: What marketers need to know

Facebook announced it will be removing access to data provided by third-party data brokers within its advertising system. It marks a significant change and signals ways in which Facebook is trying to shift under mounting scrutiny and regulatory pressure. Here’s what we know.

What’s changing

There has been some confusion about the extent of this change, largely due to Facebook’s reference to “Partner Categories” in its communication.

Facebook has so-called private audiences from vendors such as Acxiom, Oracle Data Cloud (Datalogix), Epsilon and Experian that advertisers can request through Facebook. In the ads interface, those audiences are categorized under “Partner Categories By Request,” as shown in the example below.

However, we have confirmed that Facebook is phasing out the use of all third-party targeting capabilities, both private and public.

The public categories include behavioral targeting parameters such as purchasing, in-market audiences and more.

It also includes household income targets, even though Facebook does not disclose the source(s) it uses for this data.

Just about half of Facebook’s 1,200 targeting criteria come from third-party data sources.

Why is Facebook phasing out data partners?

There are a couple of things going on that Facebook addressed in an email to advertising partners on Thursday.

One is the Cambridge Analytica scandal that has put Facebook in the crosshairs of just about every stakeholder group but advertisers so far. Last week, the company announced some new limits to the user data that apps can access as part of its response to the crisis that isn’t going away.

The second factor fueling this change is GDPR.

The General Data Protection Regulation will go into effect May 25, 2018 — less than two months from now. The broad regulation is aimed at ensuring people have control over their personal data and that companies gain explicit consent for data collection and sharing from users, among other things.

GDPR will apply to all companies that process personal data of EU citizens, regardless of where they reside. That means it applies to US companies that process data of EU citizens, whether they live in the States or elsewhere. Violators could be fined up to 4 percent of their company’s global revenue.

It’s a big deal and will affect how third-party data is used (or not used) throughout the digital advertising ecosystem, and not just in the EU. (For more on the law and how it may affect your business, see our GDPR guide and ongoing GDPR coverage on our sister site MarTech Today.)

The timeline

Earlier this month, Facebook CFO David Wehner said the company will be GDPR compliant (and warned the changes may reduce daily active user numbers). To that end, the phasing out of third-party data will begin in the EU. From the email to advertising partners:

In light of the General Data Protection Regulation (GDPR) in the European Union, this is the timeline to comply with the regulation:

• May 10: After this date, you will no longer be able to create or edit campaign using Partner Categories built on audiences from the UK, Germany, and France; however, they will be allowed to continue running until May 24.
• May 25: Facebook will no longer deliver to Partner Categories built on audiences from the UK, Germany, and France, and these targeting options will no longer be available for use on the platform. You will notified to update any targeting containing impacted Partner Categories before this date.
• June 30: Last day for creating new or editing existing campaigns using non-EU Partner Categories; they will be allowed to run until September 30.
• October 1: All other Partner Categories will no longer be available as targeting options and Facebook will stop delivering against these audiences. You will be notified to update your targeting by this date.

Reactions from advertisers and marketers

I asked Facebook if it would be creating proxy audiences in lieu of the targeting data being lost. I was told no, nothing is planned yet. Read what you will into that “yet”.

In the wake of the announcement, I spoke with several marketers about their thoughts on this change. They remain largely optimistic about Facebook’s prospects to continue delivering results for campaigns. Read more about their thoughts and reactions.