December 19, 2014

Facebook Launches Partner Categories to Improve Ad Targeting: What Does It Really Mean?

On Wednesday, Facebook announced partner categories, which are unique groups of Facebook users created using third-party data about the products and brands they purchase. Data for partner categories will come from Acxiom, Datalogix, Epsilon and other third parties, though Facebook assures users that no personal information is shared between itself, third parties and advertisers. Ads using partner categories can be displayed on desktop and mobile.

When an advertiser chooses a partner category, they’ll see how many people are in that group, a description of that group, details and the source of the data. Here are two examples, courtesy of Facebook’s post announcing partner categories:

Facebook partner categories

Facebook partner categories

At launch, Facebook is offering U.S. advertisers more than 500 unique partner category groups via Power Editor and its API. Partner categories will work with the social network’s other targeting options to give advertisers more options to refine their ads.

This is a great move by Facebook, one that will lead to better targeting for advertisers and fewer irrelevant ads for consumers, according to Peter Klein, senior vice president of media service at MediaWhiz.

Facebook“The launch of partner categories will help advertisers recognize a return on their marketing investment with Facebook,” he says. “More importantly, though, it will help both marketers and advertisers move one step closer toward understanding how consumers’ offline purchasing habits and intentions influence their online activities, and vice versa. This is something that performance marketers have long desired when using Facebook for lead generation and display advertising campaigns.”

Klein adds that partner categories will push low-engagement likes to the ledge of extinction while pulling a true ROI-based ad model closer to reality. “The upfront cost to advertisers and marketers may end up being higher, but the results on the back end will more than offset for the difference. The naysayers who are fixated on online privacy should recognize that this will help better serve the consumer – one who has already willingly registered to be there.”

Nate Elliott, an analyst at Forrester, tells The New York Times that this is a good move for Facebook but not one that will yield significantly better targeted advertising. He attributes this to the social network’s lack of expertise with turning data into useful ad targeting. “The real marketing value in social media isn’t in trying to market to people on social sites; it’s in using data from social sites to power better marketing everywhere else,” he says.

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