Facebook is shutting down a rich source of third-party consumer data flowing to advertisers as a way to steel up the integrity of the platform following the Cambridge Analytica leak.
On Wednesday, Facebook said it would remove ad targeting options that relied on consumer data from third-parties such as Acxiom, Oracle Data Cloud, Experian, Epsilon, and others. These data providers have some of the deepest insights into consumer behavior across the world—information on what people buy, where they shop, what kind of cars they drive, health profiles, incomes, family makeup—and they are integral to the entire digital ad ecosystem.
"We want to let advertisers know that we will be shutting down Partner Categories," a Facebook spokeswoman said in an e-mail statement. "This product enables third-party data providers to offer their targeting directly on Facebook. While this is common industry practice, we believe this step, winding down over the next six months, will help improve people's privacy on Facebook."
Partner Categories are part of the targeting options within the Facebook ad platform that can help define the audience for an advertiser, and they show how many people could be reached within specific target groups.
The data come from these third-parties, which is why Facebook is shutting them down. Earlier this month, it was discovered that Cambridge Analytica, also a third-party data provider, abused Facebook user data, and may have stored and shared the data against Facebook's policies.
Cambridge Analytica is being investigated in the U.S. and U.K. for allegedly using underhanded tactics to impact the Brexit vote and the 2016 presidential elections. It's also been accused of using its illicit Facebook data to exert untoward influence over voters.
Facebook is waiting on an audit by U.K. authorities to say for sure whether Cambridge Analytica kept its user data despite being told to erase the profiles years ago. Facebook has also been reviewing its internal policies and promised to audit any other third party developers who may have had similar access to data.
The plan to phase out the third-party data providers will not impact Custom Audiences, according to Facebook. Custom Audiences are targeting lists based on data owned by the advertiser.
Some of the third-party data providers also help with measuring ad campaigns, analyzing data like sales impact and brand sentiment. Facebook says they will still be engaged in that work.
Advertisers like consumer goods brands are particularly reliant on this type of third-party data, because they don't have direct lines to collect consumer data when most of the purchases of their products happen at stores they don't own. The third parties can give them valuable consumer insights.
"For some clients, this is a big part of how they advertise on Facebook," says a digital agency executive, speaking on condition of anonymity. "But in a way it's fair. If Facebook is being held to account for third-party data collection being turned into targeting on the platform, they either have to audit the collection practices or just say no more. You can't do it on the platform anymore."
Meanwhile, rivals like Google, Snapchat and Twitter all have similar third-party targeting tools. Carolyn Everson, Facebook's VP of global ad sales, said last week that the company would try to turn its data deficiency into an advantage by reshaping the conversation around privacy and consumer information online.
"I think we have an opportunity to lead in the conversation around how consumer data is protected," Everson told AdAge in a phone interview last week.
The data troubles and consumer backlash has exposed Facebook in a way that strikes at the heart of its business. Its main source of value is the data machine it built that promises to understand its 2 billion users and target ads in an unprecedented way.
Now advertisers say Facebook is trying to reposition the business, relying less on mining personal information for hyper-targeted ads. It is emphasizing the vast reach of the platform more than just the deep data insights.
"There is a silver lining for Facebook shutting down access to data," says another digital advertiser, speaking on condition of anonymity. "They are using that as a reason to promote the reach and frequency side of the business like television."