Facebook wants its audience data to replace the cookie

“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.