Inside Facebook's push to get advertisers to plug directly into its ad servers
Facebook is teaching advertisers to adapt to the privacy impediments popping up online, giving them tools to integrate more closely with the social network so that data can still work in advertising.
In recent meetings with agencies and ad technology firms, Facebook emphasizes that brands, at least ones that want to keep advertising effectively on Facebook and Instagram, should embrace the “Conversions API” that launched last year.
The Conversions API—short for application programming interface—is partly a workaround to evolutions in the online advertising world, where web tracking tools are going the way of the dodo, creating blind spots for marketers.
In a slide presentation for ad partners (below), obtained by Ad Age, Facebook sets the stage: “Governments are passing data restrictions; browsers are changing their policies around cookies; advertisers face challenges without data captured by cookies.” A failure to adapt will lead to higher costs for advertisers, Facebook says.
The presentation also promotes e-commerce features like Shops on Facebook and Instagram, which launched earlier this year. Maintaining relationships with customers, through data collected online, is crucial to making sales profitable for retailers.
Brands need a clear line of sight into shoppers—on their websites, on apps, in real-world stores, and then back to Facebook—and they need to measure the effectiveness of advertising to those shoppers. But developments like California’s new privacy law, the California Consumer Privacy Act, and Apple’s new anti-tracking policies threaten to make the internet nearly untraceable.
Facebook made $70 billion in advertising revenue in 2019, and counts more than 9 million advertisers across Facebook, Instagram, WhatsApp and Messenger—with 180 million businesses among its 3.1 billion monthly users. Facebook has made its living off the demand for highly efficient internet advertising, and argues that such advertising is crucial to sustaining businesses and driving innovation.
Converting for privacy
Facebook has made significant changes to how it processes data to comply within the new privacy constraints, but also in response to data abuses uncovered within its own platform that led to record regulatory fines in the U.S. Facebook's policies are geared toward giving brands the ability to still make use of data while complying with new laws like California’s privacy act. The Conversions API is one such tool.
“This is the kind of thing that an advertiser or business has direct control over,” says Graham Mudd, VP of ads and business product marketing at Facebook. “They choose which records to share with Facebook. They can choose not to share, where they don’t have the permission or consent of the user.”
The liability is on the marketer and brand to make sure they are being responsible with consumer data, says Lauren Huffman, director of media platforms and operations at Merkle, a Facebook marketing partner. Facebook is saying “we’re supporting your decisions on how to move forward, these are the tools to move forward, but it’s on you,” Huffman says. “It makes sense for it to be on the advertiser’s shoulders. It is the advertiser site that has to fall within compliance, and advertisers should give users the option to opt out if they want to—and if they don’t do that then it’s not fair for Facebook to be liable.”
The Conversions API has other benefits, as explained by Facebook: It bypasses web browsers as the means of passing along data. Instead, data goes directly from the brand’s website to Facebook’s ad server. “The way that the Conversions API works is a direct connection between the advertiser and their server, and a Facebook server,” Mudd says. “It’s not going through the browser in the way that a pixel does.”
But what can the Conversions API do? Mudd says it is particularly useful for brands like automotive companies and financial services firms, which still transact much of their sales offline. Internet tracking tools can’t pick up an in-store event, but retailers can still collect that data offline and try to match those consumers to their online activity. That could also give the brands a way to identify similar consumers, and Facebook can help make those connections.
The Conversions API also is made for purely digital brands, according to Mudd. “Even an e-commerce company, when they see a new customer, they predict the lifetime value of that customer based on their behavior on the website, that’s a prediction that they make on their own,” he says. “They may want to tell us, ‘Hey, this is a particularly high LTV customer, please help me find more of those.’”
Amy Rumpler, VP of paid social at Centro, a Facebook marketing partner, says that the Conversions API also is useful because Facebook’s “pixel” technology is losing its effectiveness. Pixels are strings of code that brands place on their websites, and are a mainstay of the online ad ecosystem. Pixels help marketers retarget consumers outside of their brand websites—but not if the web browsers are erasing consumers' tracks. Facebook’s Conversions API is one solution, Rumpler says. “[Facebook’s] goal is to get that adoption up … because the pixel is less reliable,” she says.
“Right now, the recommendation is still to use the Facebook Pixel but also start to go down the road of enabling the Conversions API,” Rumpler says. “So that you have both in place and, thereby, get as much performance data as possible. And also, you can tap into as much audience data as possible to make sure that you still have the ability to do things like create custom audiences based off of different segments of people visiting your website.”
One of the challenges with the Conversions API is that it does require some technical engineering to implement, meaning it has mostly been adopted by the more-sophisticated brands and marketers. Meanwhile, many of Facebook's smaller marketers still rely almost exclusively on the pixel. “It is suited to larger clients,” Mudd says, although the idea is to make it accessible to more marketers over time.