Facebook to Allow Advertisers to Use Data Broker Data for Ad Targeting: Report

social media, social networks, privacy, facebook, Facebook will expand its Custom Audiences program to allow marketers to target users based on data they’ve acquired from data brokers, according to a report in AdAge that cites sources involved in the decision-making process.

Data brokers have come under scrutiny from lawmakers and privacy advocates because they collect vast amounts of information about consumers with little oversight. It’s unclear how that controversy might affect users, either by eroding their privacy or simply by re-igniting controversy over user privacy.

Facebook already allows marketers, under its Custom Audiences program, to use customer emails they’ve obtained to target the same people on Facebook. However, the email addresses are hashed, or encrypted, so the marketers don’t learn which profiles correspond to the email addresses.

For instance, a customer with a loyalty card from Duane Reade could currently see ads for new products from the pharmacy giant when s/he logs in to Facebook. In such an arrangement, Duane Reade would only learn how many of its loyalty cardholders had been served ads. Facebook claims that it doesn’t even know which users see the ads and doesn’t gain any additional information about them.

Through a data broker, however, a retailer can also learn which customers hold loyalty cards at with a competitor, for example. Under the new program, that retailer could market to Facebook users who patronize their competitors.

Data brokers are essentially the publishers clearing house of advertising segmenting information, amassing information on specific consumers from various retailers. Some companies also acquire criminal records and credit reports, though information used for those purposes falls under stringent regulations.

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