Lack Of Third-Party Data Won't Improve Facebook Privacy

A lack of third-party data in Facebook's ad targeting algorithms won't improve one's privacy on the world's largest social media network, NDTV Gadgets reported Friday, citing numerous industry watchers and experts who recently shared their thoughts on the company's decision to discontinue its Partner Categories program which allowed marketers to complement Facebook's data with those obtained from other sources, both online and offline. Doing away with data brokers is a "no-brainer" because third-party data offers "very little incremental value" to marketers outside of what Facebook already knows about consumers, yet it puts the Menlo Park-based company under significant scrutiny, according to Peter Reinhardt, Chief Executive Officer of analytics firm Segment.

Data brokers like Acxiom — whose stock is almost 20-percent down following Facebook's move — are companies that harvest consumer data through store loyalty programs, online and offline surveys, and a wide variety of other means. Such firms generally pay for accessing the data they seek and often work with telemarketers and similar businesses to whom they sell aggregated information instead of trying to leverage the gathered data directly. Kenneth Sanford of data analytics company Dataiku believes Facebook now has little use for such data even though it initially found it extremely useful, having partially relied on it to develop prediction models capable of forecasting consumer behavior in a relatively accurate manner. While the lack of third-party data will prevent Facebook from knowing e.g. which users bought certain products outside of the scope of its ecosystem going forward, the very fact it knows what they bought in the past is often enough to predict their future behavior and changes thereof, the expert suggested.

David Ciancio of data science firm Dunnhumby called the changes "relatively marginal," having predicted they won't significantly impact the accuracy of Facebook's ads in the long-term. For now, the move is likely to most negatively impact marketers who don't collect a lot of data on their own customers. While Facebook could e.g. accurately identify someone as a parent of a toddler, the lack of third-party data may push some marketers into paying to serve ads promoting baby clothes to one parent even though their spouse is the one who exclusively takes care of such shopping, some experts believe. The discontinuation of the Partner Categories program that's set to take place in a gradual manner over the next half a year has been made in response to the Cambridge Analytica controversy, with Facebook claiming the removal of the feature will improve the privacy of its users, even though many are now contesting that claim.

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Dominik Bosnjak

Head Editor
Dominik started at AndroidHeadlines in 2016 and is the Head Editor of the site today. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]