Facebook Inc. will soon start using information gathered from third-party websites and mobile applications for more targeted advertising.  In a statement released June 12, the company said that it is “making ads better” by showing its 1.28 billion monthly users “ads that are more relevant to their interests.”

“Today, we learn about your interests primarily from the things you do on Facebook, such as Pages you like,” the company stated. “Starting soon in the US, we will also include information from some of the websites and apps you use. This is a type of interest-based advertising, and many companies already do this.”

Facebook itself already collects data from third-party advertisers in addition to maintaining internal profiles of its users based on the comments and posts they like.  Cotton Delo provides an excellent technical explanation of the company’s advertising and data collection practices at AdvertisingAge.  For example, third-party apps that allow users to log in using Facebook or have Facebook “like” buttons on their websites already send that information to Facebook.  Furthermore, retailers can place a bit of code into their websites to track how well their Facebook ads are performing, information Facebook also has access to.

Here’s what different.  First, while Facebook has historically had access to much of this information, it has not incorporated it into advertising.  Second, as Delo explains, “Historically, interest-based targeting on the social network hinged on users’ own declarations of their likes and interests in their profiles, as well as Facebook pages they had ‘liked’.”  Now, Facebook is using “passive” data–i.e., information gathered simply through visiting a website.  For instance, as Facebook illustrates: “Let’s say that you’re thinking about buying a new TV, and you start researching TVs on the web and in mobile apps. We may show you ads for deals on a TV to help you get the best price or other brands to consider.”

Additionally, a Facebook spokesman reportedly announced that the company will not honor “Do Not Track” (DNT) settings in web browsers “because currently there is no industry consensus.”  (Facebook will honor the standard in iOS and Android.)  DNT is a proposed header field users can enable in their web browsers that asks websites not to track their activity for advertising purposes.  DNT is widely ignored, though companies may be required to disclose whether they honor it or not in their privacy policy.  Twitter and Pinterest currently honor the setting, whereas Google and Yahoo do not.

While Facebook will not honor Do Not Track settings, it plans to introduce “ad preferences,” a new tool that allows users to customize their ad profile.  For example, Facebook explains, “[i]f you’re not interested in electronics, you can remove electronics from your ad interests.”

Facebook’s recent announcements arise against a backdrop of increasing legal scrutiny over privacy concerns.  In 2012, Facebook settled privacy charges with the Federal Trade Commission (FTC).  Section 5 of the FTC prohibits “unfair or deceptive acts or practices in or affecting commerce.”  Non-compliance may result in fines or a consent order implementing a program that must be audited for a number of years.  Under the settlement, Facebook must get users’ consent for certain changes to its privacy settings and is subject to 20 years of audits.

–Chris Martucci

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