Facebook Wants More Info from Users to Better Target Ads

By Kate Rogers
Published March 26, 2013

Facebook (NASDAQ:FB) users readily share their personal information on the site, but the company is now using third-party vendors to learn even more about its billion users to help create more revenue.

The social media giant announced in late February it is partnering with behavioral analyst firms including Datalogix, Epsilon, Acxiom and BlueKai to enhance its online marketing. The data it will seek from these firms includes loyalty card transactions and customer e-mail lists as well as web browsing records.

“For example, an auto dealer may want to customize an offer to people who are likely to be in the market for a new car. To do this many businesses work with third party companies to better understand who might be in the market for a new car. With today's updates we will allow businesses to do the same thing through our custom audiences tool in ways that are consistent with our commitments to protect people's privacy,” the company said in a release.

The more detailed information Facebook can provide to potential marketers, the more it can charge for ad space. The company says working with outside firms to collect behavioral data will help it create a more effective advertising platform and boost advertising revenue.

But Facebook must walk a fine line with the changes and policies it implements so as not to upset users. Back in 2011, users cried foul over the site’s retroactive changes to to its privacy policy. The company quickly reversed course and now has to obtain users consent before making "material retroactive changes" to its privacy policies,  after a settlement with the Federal Trade Commission.

But Cliff Courtney from Zimmerman Advertising, says Facebook’s move is smart and will likely please more consumers than anger them.

“Just like in the movie, The Social Network, [Zuckerberg] says getting to one billion users is cool,” Courtney says. “Well now, what’s cool is having a billion people do what you want them to, and that is behavior modification.”

Some users may potentially be turned off if they feel manipulated with the ads hitting them. However if the ads are saving users time and also providing them with new information, it’s a win for both parties.

“If this will give me exactly what I want, with a lot of specificity, that is what people want,” Courtney says. “They don’t have time to waste on products that don’t interest them.”

Facebook currently shares the products and companies the people in your social network are “fans” of in the Newsfeed, however, consent on behalf of the Facebook user is required.