Facebook Announces New Ad Policy Which Eliminates User Data From Third Party Networks

-Sponsored Ad Icon-Facebook is finally taking strong actions against ad networks that have been abusing the platform and starting August 3rd will have new advertising guidelines according to Nick Gianos of Facebook. According to the new policy, “ads that display user data are not allowed in Platform applications unless specifically approved by Facebook”. This is a huge policy shift and it’s one that could significantly effect the platform ecosystem as I’ve been writing over the past couple weeks.

Within the next day Facebook will announce the new ad guidelines but it’s clear that Facebook is going to get aggressive in order to protect the user experience and I applaud them for doing so. There’s going to be some significant backlash from some of the larger ad networks though as they’ll need approval to run ads and could start seeing their ads banned from the platform if they don’t. There have been a number of issues with some of the ad networks but the largest issue as pointed out in the blog post is that “developers have never been allowed to send user data received from Facebook to ad networks”.

Unfortunately many applications were passing data and it was pretty clear that this was going on. Will this stifle advertising innovation from third party networks? Probably but Facebook had to make a big call which was to protect the users who were not clear about how their information was showing up in the third-party ads. Many users don’t even realize the difference between Facebook advertisements and third-party ads on the Facebook platform.

The companies that will be least affected by this shift is Offerpal, Super Rewards, and other offer-based programs. Display advertising networks like Social Media, RockYou, Slide, Social Cash, and numerous others could be substantially damaged. While not all are collecting data, a large number are as Dwayne LaFleur points out in the comments. What hasn’t been seen yet however is Facebook’s enforcement of this new policy which will be an important component of how things play out.

Facebook states that they will “enforce actions against developers and applications that include policy-violating ads” which makes sense considering the developers are the first point of failure in the data leakage process. We will continue to cover this evolving story over the coming days and weeks. When we spoke to Facebook last week, they had some strong statements and this new policy appears to be a continuation of that policy.

This will most definitely have a substantial impact on the Facebook app economy.