Facebook wants its audience data to replace the cookie
Internet advertising is an industry built in large part on the back of the humble cookie, but that’s under threat as people move to mobile and the cookie’s flaws become more prominent. Facebook has a clear answer for a replacement: its trove of audience data.
Its latest move to establish itself as the source for ad targeting data across the Web is an announcement today that LiveRail, the video advertising platform it acquired for around $500 million in July 2014, will enable publishers to use anonymized Facebook user data to target ads on their sites and mobile apps. That means publishers like A&E, Dailymotion and Univision can now sell blocks of advertising inventory for specific demographics — say, men 18 to 24 — as determined by Facebook user data. It will provide assurance that media buyers are indeed buying the audience segments they want to reach, making it an attractive proposition for publishers and brands alike, according to media executives.
“Facebook knows what they have inside the Facebook ecosystem is infinitely more valuable than what’s out there currently,” said Jason Bateman-Nadler, digital marketing manager at advertising agency RPA. “Once they open the floodgates and enable us to start leveraging the massive amount of personal info they have — behaviors, marital status, interests — that’s really a goldmine.”
The move speaks to Facebook’s desire to be a major advertising partner for publishers, brands and agencies outside its own properties. In addition to the LiveRail supply-side platform with its new demographic capabilities, Facebook has an ad server, Atlas, which agencies such as Omnicom, Merkle and Havas now use to serve and measure ads on desktop and mobile sites. It also operates the Facebook Audience Network, which enables marketers to extend their Facebook ad campaigns to non-Facebook mobile apps. They can even do so through LiveRail, which now supports in-app mobile display advertising — another component of Facebook’s announcement today.
It also points to the ever-larger shadow Facebook is casting on the media world, particularly as the shift to mobile devices gains steam. Facebook is poised to invite publishers to publish directly on its platform, setting itself up as an all-power intermediary. With a pole position in audience data, publishers would have even more dependence on Facebook.
“Ultimately, the downside is we risk giving Facebook so much power, just like we gave so much power to Google,” said Edward Kim, CEO of SimpleReach, a provider of content performance measurement and distribution tools. “With Facebook, it’s really no different.”
LiveRail and its ingestion of Facebook data “makes Facebook an important operating system of the digital ecosystem, certainly being able to rival Google and its DoubleClick infrastructure,” said Dave Morgan, CEO of Simulmedia, a targeted television advertising company. “This puts their lead in some areas under pressure. Certainly in the digital video area, Google should be worried.”
Making Facebook data more broadly available could reduce ad fraud, added Morgan. “When you’re targeting on data from real people, you are by definition not targeting just on lookalike data, which could be robot traffic,” he said.
All this value for marketers — more precise targeting, fraud reduction — could yield higher prices for publishers on their video and display inventory. “From a pricing and value add standpoint, when you think about the targeting they’re laying on, there’s a high potential that could boost some of the CPMs with clients they’re looking to sell to,” said Mike Dossett, digital content strategy supervisor at RPA.
It will also mean more relevant ads for users, who will see ads tied to their social handle, as opposed to ads inferred from cookies. “It’s the next step in bringing that identity to the forefront and really knowing who people are,” said Mark Renshaw, global chief platforms and partnership officer at creative agency Leo Burnett. “It’s a new way to think about what content we create for whom.”
It’s unlikely publishers will shy away from handing Facebook greater control of their revenue streams, despite how dependent they already are on the company for traffic, said Forrester Research senior analyst Susan Bidel. “From a publisher point of view, being able to monetize on mobile more effectively will certainly be something they consider, because it’s a challenge for them now,” she said. “Publishers should take Facebook at face value, and take advantage of the additional targeting and revenue generating capabilities they are offering.”
This is separate from Facebook urging publishers to publish articles and videos directly to Facebook, an initiative that has generated far more skepticism than Facebook’s push into ad tech.
“Media and advertising are moving in a direction where content and data are complementary of each other, which leads to more accountability for the audience that the ad campaigns reach,” said Sarah Shriver, vp of of digital ad sales at A+E Networks. “This partnership allows us to more efficiently and effectively serve ads against a desired audience in sync with quality, premium content.”
To make the ad targeting work, LiveRail collects the device identifier as well as other device information from publishers’ apps and sites. But it doesn’t share that data with Facebook, said Facebook spokesman Tim Rathschmidt, who characterized the information exchange between Facebook and LiveRail as one-way.
While Facebook is currently limiting the information it shares to age and gender data, it “will likely look to expand to other areas like interests,” said Rathschmidt. There’s a hunger for that in the advertising industry, said Jeremy Lockhorn, vp of emerging media and U.S. mobile lead at digital agency Razorfish.
“Demographic data is valuable, but it is increasingly only a starting point, even for TV-heavy brands that historically have focused on [target rating points] against a specific age/gender segment,” said Lockhorn. “Layering in behavioral data and other data that enables a brand to more directly connect ad exposure to a business objective is where things are ultimately going.”
Lucia Moses contributed reporting to this article. Main image courtesy of Facebook.
Hearst UK wants all of its brands to have Good Housekeeping’s authority in product testing
The Good Housekeeping Institute set the precedent for Hearst UK and the new Hearst Institute is looking to replicate those successes across all its brands.
Member ExclusiveDigiday Research: The pandemic sped the wrong things up for publishers
Publishers are now much more reliant on direct-sold ads, and at an industry level, diversification strategies have made little progress.
California Attorney General says popular, digital ad opt-outs from trade groups don’t comply with CCPA
Commonly used opt-out tools from the Network Advertising Initiative and Digital Advertising Alliance will not suffice for compliance with California's privacy law.
SponsoredData-driven solutions: Charting a better way forward for brands and publishers
Travis Clinger, senior vp of addressability and ecosystem, LiveRamp Updates to mobile identifiers and browser data privacy policies have become an everyday part of life in the advertising industry. The browsers and device manufacturers have made privacy a competitive differentiator, as consumers have become increasingly concerned over how their data is being used. As an […]
Why two brothers are betting on creating new brands and e-commerce to grow their media company
Former Bonnier Corp. CEO Eric Zinczenko is the new COO/president of his brother David Zinczenko's company Galvanized Media.
Member ExclusiveMedia Buying Briefing: Artificial intelligence ‘is gonna ruin the world… and then we adapt’
A look at the different ways artificial intelligence is wending its way into media planning and buying.