On Wednesday, Facebook announced that it would be ending the ad-targeting option called Partner Categories, where advertisers can target specific groups of Facebook users by using offline demographic and behavioral data such as purchase history. This data is collected via 3rd party data brokers such as Oracle Corp., Acxiom Corp., and Experian PLC, which Facebook is now cutting ties with. Along with eliminating Partner Categories, the world’s largest social media company will now allow users to control their privacy and security settings from one centralized location.
Partner Categories has been a popular and widely used tool particularly among dealership groups and the automotive industry. So with the elimination of this ad-targeting category and the end of partnerships with large data brokers, we asked our CEO, Robert Donovan, what he thinks are the biggest implications for brands and dealerships. Here is a list of 3 opportunities that Robert thinks this news uncovers.
Opportunity #1 – “First Party Data Just Became Even More Important and Valuable”
This is the perfect time for dealerships and other advertisers to start using their own extremely valuable first-party data. First-party data is the information gathered about website visitors and customers directly by the company. This data ranges from contact information, site-interaction and information on what they have previously purchased. First-party data is what’s stored in CRMs and DMSs (Dealership Management Systems). While some dealerships have been doing things like look-alike modeling most have only scraped the surface of what is possible. We are rolling out solutions for dealerships now that uses machine learning to predict new purchases and service opportunities. This isn’t based purely on things like lease termination dates or other data points that have long been in play – this is truly advanced algorithm kind of stuff that is highly relevant to the customer.
Opportunity #2 – “Time to Double Down on Custom Audiences”
While third party data sources are on the way out Custom Audiences are still a prime opportunity for maximizing the effectiveness of your Facebook Campaigns. A little refresher on Custom Audiences in Facebook: Custom Audiences allow marketers to use their own contact lists to reach those customers with targeted ads on Facebook. These lists can also be used for look-alike targeting for gaining new customers. This change will lead to more opportunities in Custom Audiences and a more thorough approach to vetting the data sources. I also expect to see new data business models emerge that combines sources into “Mega” Custom Audiences that are touted for their quality and conversion rates.
Opportunity #3 – “Take a Second Look at Ad Platforms like LinkedIn and Twitter”
When one door closes another one opens. Over time there will likely be alternative ways to get behavioral targeting through Facebook but until that time there is an opportunity to consider channels that have this capability now. I still think that LinkedIn, with close to 500 million users, is an untapped opportunity for dealerships as well as B2B and B2C brands. This is an extremely affluent group and they have discretionary income. The targeting opportunities are terrific and with the right form of content, this is an untapped source. Twitter has been up and down the last few years but I think it is actually a great place to be carving out some ad budget. Twitter has incredible behavioral targeting ability combined with keyword targeting and there are a number of ways to leverage the over 300 million active users on the platform.
I think the natural reaction to this news is to look at the downside particularly with brands that were only using one part of the Swiss Army Knife in Facebook. But the reality is consumers are not flocking off the platform in droves just yet and Facebook remains an extremely powerful source for marketing your dealership or brand. From Marketplace to Custom Audiences to other platforms just remember this, diversification is almost always a good thing.