Facebook Now Tracking Offline Purchases: Useful Innovation or Privacy Invasion?

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Facebook recently inked a new partnership deal with a data metrics company called Datalogix. The goal? To keep track of Facebook users who see ads and then later go on to purchase particular items from brick-and-mortar stores.

This move represents a fascinating development in the field of advertising analytics but also a concern for privacy advocacy groups upset with Facebook’s exploitation of its users’ information.

It also comes at a crucial time for Facebook, whose shares have fallen to $21.83 (as of Oct. 3) from its initial public offering price of $38 back in May.

Analytics for online advertising is typically thought of to have certain limits: an advertiser can receive rich data on the performance of its campaigns that lead to online sales or other conversions like email signups. But what about an ad that does nothing more than get the idea of a product or service into a potential customer’s mind? Many times that idea stays with the individual for days, weeks, or even months, and later on when it is time to make a purchase in that category, the brand awareness created by the online ad leads the user to buy from that business.

Under most models, there is no way to accurately track these types of delayed conversions that occur in the real world. But Datalogix is one example of a company that claims to have an answer.

The basic way Datalogix will work is to match data from Facebook with consumer purchase data from stores. This allows an advertiser to view sales from Facebook users who saw its ad compared to users who did not. More specifically, it matches email addresses that users provided to stores, possibly for a frequent-shopper card or weekly newsletter, with emails used to register for Facebook accounts.

Facebook is quick to point out that no one is identified by name, and that the two sets of email addresses are connected via anonymous “hashes.”

But still, privacy advocacy groups, including the Electronic Privacy Information Center, are concerned that this new practice might violate a recent settlement in which Facebook “agreed to obtain users’ ‘express consent’ before sharing any information that exists outside the auspices of its privacy settings and to provide users with ‘clear and prominent notice’ anytime their information is shared.” (CNET)

The group’s president Marc Rotenberg will urge the Federal Trade Commission to investigate this new deal and determine whether it violates the earlier settlement.

A Facebook spokeswoman has responded that the social networking company “know(s) 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.”

A Facebook engineer added that … Datalogix does not send us any of their purchase data, meaning we cannot specifically tell whether or not you purchased a marketer’s product. Finally, with this partnership, Datalogix only sends the marketer aggregate information about large groups of people. None of this data is attributable to an individual Facebook user. (Source)

What do you think about this new development? A brilliant marketing move or an intrusion into user privacy?

andrew walshAndrew Walsh is the owner and editor of Social Web Q and A. He is a freelance writer, academic librarian and web entrepreneur. Check out his book Savvy for the Social Web.

photo credit: jrdurao

 

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