Facebook’s Partnership With Datalogix Brings Privacy Concerns

By Justin Lafferty 

Facebook has compiled myriad data about what users are doing on the site. What about when they go to another corner of the Web? The company has partnered with Datalogix in an effort to see if people who see ads on the social network end up actually buying the products. There’s already a movement for the Federal Trade Commission to investigate the deal.

According to Financial Times, Datalogix has purchasing data from roughly 70 million American households — largely drawn from loyalty cards and programs at major retailers. Facebook uses these data and combines them with its own data to track whether or not people made a purchase after seeing an ad on the site.

So far, Facebook and Datalogix have measured 45 campaigns. Brad Smallwood, Facebook’s head of measurement and insights, said that in 70 percent of cases, for every $1 a marketer spent on Facebook, it earned an additional $3 in incremental sales.

Financial Times notes that users’ email addresses and other identifying information are made anonymous and collected into groups of people who saw an ad and those who did not. From this information, Datalogix puts together a report for Facebook and its advertisers, so they can see what translated into sales and what didn’t.

While it’s great for Facebook to have this kind of information, not everyone is so happy. CNET reports that several privacy experts are pushing for the FTC to look deeper into this partnership.

Jeff Chester, executive director of the Center for Digital Democracy, told CNET:

I believe the FTC should be investigating all this as part of its review under the consent decree … Ad exchanges allow them to take this data and apply it in real-time and sell it to the highest bidder, including Facebook. They are using reams of additional data, including from online, to target Facebook users.

Readers: How do you feel about the Facebook-Datalogix deal?