Facebook announces data partnerships to help advertisers target users by offline purchases and attributes

As part of an expansion of its Custom Audiences tool, Facebook will anonymously match data from consumer loyalty programs and other sources with user profiles in order to target ads by offline purchase habits and other attributes. Advertisers will be able to select from a number of predefined targeting categories, such as “soda drinkers” or “auto-intenders.” This is similar to Facebook’s broad category targeting, but it is informed with data from third parties that many advertisers already work with.

Businesses that currently have deals with one of these data companies can go beyond the preset targeting categories and use the same information they use for targeting their other marketing to create campaigns on Facebook.

For now, this type of targeting will only be available to U.S. clients who have accounts managed directly by Facebook. It will become available over the next week or two and will eventually be opened up to self-serve advertisers, just as Custom Audience targeting has been. Custom Audiences enable advertisers to apply their CRM data to social advertising by having Facebook anonymously match consumers by email address, phone number or user ID.

As we wrote about last week, many media companies already partner with Datalogix, BlueKai and similar companies to target users by offline purchases. Most consumers are unaware that this goes on, but with Facebook moving into this space, it is likely to face a lot more scrutiny. In a note on its Facebook and Privacy page, the social network says it will give users the ability to opt out of this type of targeting through the “About this ad” link or from the Help Center.

Last year Facebook began working with Datalogix to measure how Facebook ads affect in-store sales. Datalogix has information from loyalty cards and programs at more than 1,000 retailers. Facebook can then match email addresses or other information associated with those memberships with the email addresses or information associated with users’ Facebook accounts. All emails and personally identifiable information is anonymized, but the companies can compare the differences in sales among groups who saw certain Facebook ads versus those who didn’t.

Now, Facebook can not only measure the effectiveness of its ads with this data, but it can target them this way. For instance, Datalogix may have a cluster of consumers that it knows are “healthy snackers.” Facebook can anonymously match these profiles and allow a CPG brand to reach these users with Sponsored Stories or Offers ads in News Feed.

On the company’s fourth quarter earnings call last month, CEO Mark Zuckerberg suggested that improving ad targeting was a big focus for the social network this year.

“There’s a big opportunity in front of us to make every ad that we’re showing a lot better,” he said. “The biggest ways we’re going to do this are by improving targeting and relevance so we can show everyone content that they care more about and by designing better ad products that aren’t just about links and text and images. For targeting, I’m most excited about the work that we’re doing on Custom Audiences.”

Earlier this month, Facebook began testing a new feature called “Lookalike Audiences,” which helps advertisers target users similar to those in their Custom Audience databases. Facebook’s algorithms find users who are similar to those in an advertisers’s existing Custom Audience group.