Facebook’s Quiet Focus on Behavioral Targeting
Published: September 20, 2012
Author: Caroline Watts
Since its IPO this spring, Facebook has continued to quietly test product after product, doubling down on the products that prove successful and abandoning those that haven’t, all the while searching for more robust forms of targeting that advertisers can use to reach the right audience.
One thing seems to be sure: Facebook is moving toward incorporating more forms of behavioral advertising. By allowing advertisers to bring their own data onto the platform and expanding possible targeting pools, Facebook’s new ad formats could prove to be a boon to marketers.
Back in June, Facebook announced the launch of the Facebook Exchange, a new real-time bidding platform that would make retargeting within Facebook possible for the first time ever. Initially, Facebook kept the lid on the project, reportedly denying access to an approved partner who said too much to the press. While the initial lockdown led some to joke “the first rule of the Facebook Exchange is that you don’t talk about the Facebook Exchange,” now the exchange is out of beta, and everyone is talking.
In a well-coordinated PR blitz, partners released separate statements outlining the success of their results, and one DSP, Triggit, has even announced that they’ll be pivoting their advertising business to focus primarily on Facebook retargeting from here on out.
All partners have claimed significantly lower than average CPAs, though these numbers are likely to rise. As more DSPs gain access to available inventory, competition will heat up, increasing media costs and thereby increasing effective CPAs. Still—the initial success is telling, and FBX is likely to have a very bright future.
CRM Retargeting on Facebook
CRM retargeting, a relatively new marketing tactic, is the practice of serving online display ads to people with nothing but an email or mailing address. Here’s how it works: the CRM data is onboarded, which means email or mailing addresses are hashed and then anonymously matched with hashed email addresses online, leaving a fully anonymized, private, and secure cookie pool to whom you can then serve display ads.
Recently, it was announced that Facebook would be rolling out a similar service, allowing advertisers to target Facebook ads based on emails and phone numbers for their own CRM. No, Facebook will not be sharing private user data, but, like in CRM retargeting, they will allow advertisers to target based on permission data they’ve already gathered. So, if you’re a retailer, and you have a list of emails of people who have purchased from you in the past, you could serve targeted Facebook ads in an attempt to re-engage them.
This move is much more unexpected than the announcement of FBX. Site-based retargeting is a tried-and-true tactic and has been a digital staple for long enough that people are comfortable with it. CRM retargeting is a much newer tool, with fewer success stories, and much more devastating privacy implications. Though the process is secure and data leakages yet unheard of, it’s much more complicated than site retargeting and much less familiar. Based on the responses to FBX, I’m frankly surprised the backlash here hasn’t been larger.
Unsurprisingly, Facebook kept mum about the test; the story was broken by Inside Facebook based on an accidental sighting of this new capability within the Power Editor tool, which Facebook had not intended to make public. A Facebook spokesperson later confirmed to TechCrunch that they were, in fact, testing the new capability with a handful of advertisers.
What This Means for Marketers
The introduction of CRM retargeting is a bold move for Facebook and demonstrates a commitment to new and innovative ad tech that will help marketers reach the right people online. I anticipate that this particular technique will, like FBX will, prove successful and stand the test of time.
As Facebook launches new and more innovative methods of targeting, they may become more deserving of marketers’ ad budgets. I would encourage any digital marketer with the means and the opportunity to test these new ad targeting methods as they become available.
– Caroline Watts