Only a few of Facebook's premium advertisers like big CPG brands who spend a minimum with the site can use the DataLogix service to track Facebook ad impact on offline purchases.
Big name laundry detergent brands don't usually sell products online, which is why Facebook has partnered with data matching firm DataLogix to help measure the impact of Facebook ads on in-store sales. The two companies have partnered for about a year, according to a Facebook spokesperson.
In order to determine Facebook ad campaign results like sales lift, DataLogix consumer information is matched up against Facebook profile data, and information associated with Facebook user accounts such as email addresses and phone numbers. Then, the matched information is encrypted. The goal is to measure the effectiveness of Facebook ads for large brands at scale.
Not just any Facebook advertiser can use the DataLogix service. Only a few of Facebook's "managed clients" - premium advertisers that must spend a minimum with Facebook to warrant special hands-on treatment - can use the measurement system.
Facebook's rapidly expanding ad exchange, FBX, is also only open to advertisers willing to spend a minimum amount with the site, according to ClickZ sources familiar with the service. The exchange also uses outside data, but in this case it's to target ads to Facebook users rather than to tie those ads to offline purchases. FBX partners include several DSPs and ad networks that use a variety of data gathered online and offline, from demographics to household income levels and political party affiliation.
The DataLogix relationship was first reported by The Financial Times on Sunday and since has generated scrutiny from privacy advocates. DataLogix houses more than 300 online audience segments that are based on offline purchases and demographic and financial data, according to the company's site.
Despite a steady drum-beating by privacy groups concerned about Facebook data exploitation, the company seems increasingly willing to explore new ways to monetize its vast data set to appease barking investors.
Facebook does not exchange personally identifiable information with DataLogix or advertisers using the partners' services to measure their campaigns. The social giant also stressed it works with a major auditing firm to ensure user privacy is protected.
"We are working with Datalogix to help advertisers understand how well their Facebook ads are working," noted a Facebook spokesperson in a statement sent to ClickZ. The firm likens its relationship with DataLogix to those with comScore and Nielsen, which also help it measure campaign results for advertisers. Facebook has worked with Nielsen to use its survey panels to measure ad campaigns. It has been suggested those surveys have been used to help track how Facebook ads have influenced offline purchases, too.
"We know that people share a lot of information on Facebook, and we have taken great care to make sure that we measure the effectiveness of Facebook ads without compromising the commitments we have made on privacy. We don't sell people's personal information, and individual user data is not shared between Facebook, Datalogix or advertisers," continued the Facebook statement.
DataLogix partnered with Nielsen in 2009 to allow household-level online ad targeting using Nielsen's audience cluster PRIZM data, which lumps consumers into audience segments and can target them by Zip code.
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Kate Kaye was Managing Editor at ClickZ News until October 2012. As a daily reporter and editor for the original news source, she covered beats including digital political campaigns and government regulation of the online ad industry. Kate is the author of Campaign '08: A Turning Point for Digital Media, the only book focused on the paid digital media efforts of the 2008 presidential campaigns. Kate created ClickZ's Politics & Advocacy section, and is the primary contributor to the one-of-a-kind section. She began reporting on the interactive ad industry in 1999 and has spoken at several events and in interviews for television, radio, print, and digital media outlets. You can follow Kate on Twitter at @LowbrowKate.
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Gartner Magic Quadrant for Digital Commerce
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12:00pm ET/9:00am PT