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April 3, 2018

Facebook Killed the Easy Button: What Marketers Need to Do Now

In the wake of Facebook’s limits on the use of third-party data, brand marketers must re-consider their customer data strategy.

Facebook’s move to drop third-party data providers like Datalogix, Epsilon, Acxiom, and BlueKai, ostensibly in response to Cambridge Analytica’s misuse of customer data, has marketers and advertisers scrambling to understand what this means to their current acquisition strategies.

Now that the party’s over (or will be in six months when Facebook kills the Partner Categories product) brand marketers need to reconsider their first-party data strategy.

Marketers primarily use third-party data in their acquisition strategies to get in front of new potential customers, and these strategies typically see the lion’s share of marketing focus and investment. And with Facebook ad revenue topping $40-billion last year—it’s hard to argue that Facebook advertising isn’t a primary choice in a marketer’s acquisition strategy.

Since 2013, marketers and advertisers have used Facebook’s Partner Categories, a partnership with the major third-party data providers, to unlock highly-targeted, behavior-based segmentation. All that a marketer has to do is activate the partner categories from their preferred data provider, and target away in Facebook’s ad platform. Finding specific Facebook audiences of binge soda drinkers, who recently financed a home, and are heavy visa credit card spenders who primarily shop online—and who look like recent customers in other ways—takes minimal effort.

Marketers seeking new customers spend a lot of money via Partner Categories on what is, given its value comes from third-party data, still a bit of a guessing game. Even though this product offers some reliable segmentation tied to real behaviors, it is still just a hope that these individuals will purchase their products or read their content.

But since this Facebook product came on the scene brand marketers have been able to do a good enough job with acquisition using this third-party data, all thanks to the Partner Categories “easy button.”

And now that easy button is going away.

A forcible shift in the wake of a more significant problem: Waning of Customer Trust

The thing is, access to third-party data isn’t the problem. If marketers genuinely need third-party data, they can still purchase it from Acxiom, Epsilon and the like and take a more manual approach to leveraging that data (though they will likely have to verify to Facebook that all of the data has been gathered with expressed consent).

The real problem lies with the growing customer mistrust of digital marketing, as well as looming regulations–such as GDPR from the EU–the Cambridge Analytica debacle, and a growing list of headlines about the misuse of customer data. Marketers are beginning to understand that becoming a steward of their customer data is the new table stakes.

Marketers collect first-party data every day across the channels in their business. Demographic data, purchase behavior data, web experience and browse data, preference data, engagement data, service data…this list goes on. And it’s without question that this first-party data, collected from actual users and customers, is more powerful than any third-party purchased data.

Brands who’ve already made the shift to a first-party data strategy remove quite a bit of friction with their marketing efforts too, and their advertising and targeting efforts experience much higher returns. Some of our customers have gained 40% greater efficiency with their Facebook advertising efforts and earned 60% higher return on ad spend when leveraging their first-party data.

Successful brands who double-down on their customer data strategy and prioritize the leveraging of their valuable first-party data, likely won’t miss that “easy button.” These brands will make the investments necessary to unify siloed teams and tools–and the customer data they hold–into a unified platform that not only provides crystal-clear transparency and a verifiable way to manage customer consent, but also allows marketers to know and serve customers with value and earn their trust.

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