Facebook says that data collected from its partnership with loyalty-card tracker Datalogix shows people are swayed to make purchases after merely viewing an ad, even if they did not click on it.
The social-networking site, which publicized its findings through a press release and at the Interactive Advertising Bureau's MIXX conference in New York, likened the findings to a term used by TV marketers, known as "reach." The findings were presented at the conference by Brad Smallwood, Facebook’s head of measurement and insights.
"While these conclusions might seem familiar to traditional marketers who use TV, they represent a substantial shift from the focus on click-optimization that is more typical of digital campaign planning," Facebook said.
Facebook's announcement comes soon after its partnership with Datalogix, revealed last week, has generated controversy over how it might impact users' privacy.
Datalogix, based in Westminster, Colorado, collects data on what people buy through loyalty card programs administered by retailers. Those loyalty card users are matched to their Facebook profiles using hashes, or cryptographic representations, of users' email addresses that they've given to both retailers and Facebook, an arrangement Facebook maintains does not violate its promise to transfer personal data to other parties.
The Center for Digital Democracy and the Electronic Privacy Information Center wrote to the U.S. Federal Trade Commission last week, asking the regulatory agency to examine the privacy implications of the deal. Facebook automatically enrolls users in the program. They can opt-out by filling out a form Datalogix's website but not directly through Facebook.
Facebook ads focussed on branding, not direct marketing
Facebook studied more than 50 digital campaigns conducted using Datalogix's data. Overall, it showed that 99 percent of the sales that were generated from branding campaigns run on Facebook came from people that viewed an ad but did not click on it.
The effectiveness of the advertisements depend on the frequency with which ads are shown, which can be determined by using Datalogix's tool, Facebook said.
Also on Monday, Facebook wrote more about its partnership with Datalogix as part of Facebook Exchange (FBX), its online system that allows advertisers to bid on advertisements shown in real time.
Datalogix sends Facebook reports on "large groups of people" comparing their product purchases and whether those people saw or didn't see an ad, wrote Joey Tyson, a privacy engineer. Facebook and Datalogix use the same method to hash email addresses, which enables them to match up users and categorize them.
Facebook doesn't see any purchase data, and Datalogix does not receive information from people's profiles, Tyson wrote. An "industry-leading auditor" has confirmed how the process works, he wrote.
"In our view, this is a win-win situation for marketers and for you," Tyson wrote.