Facebook said in late March it will modify its approach to third-party data companies by shutting down its Partner Categories. That product enables third-party data companies to offer targeting directly on Facebook. It will be phased out on Oct. 1.
Facebook's action won't eliminate third-party data use but will put more emphasis on the relationship between those third parties and advertisers that use the data.
According to Facebook, an advertiser can work individually with Experian, Oracle or another third-party data provider, and upload audiences into the advertiser's network to reach relevant people using Facebook's "custom audiences" tool after verifying appropriate permission.
Businesses can create custom audiences from lists of their customers, who are then specifically targeted on Facebook.
The advertisers would then "own that relationship with Oracle. Facebook's not involved," Stephanie Latham, Facebook's director of U.S. automotive, told Automotive News. "You can bring your data to the table, but we're not brokering it."
Asked if the change was meant to protect Facebook from scrutiny if a third party was found to have improperly gathered data, a company spokeswoman said, "It's less about protecting Facebook and more about making sure the right party is verifying the necessary permissions needed to protect people's privacy and the use of their data."
Advertisers say the effects of the shift will be minimal.
While third-party data are helpful in segmenting audiences to target, they haven't been the main source of customer information for some prominent automotive advertisers. Marketers at CDK Global, Cox Automotive's Dealer.com, Digital Air Strike and Reynolds and Reynolds' Naked Lime say their work on Facebook has been driven primarily by first-party data from dealership management systems and other sources, including Web traffic on dealer sites.
"Naked Lime has the advantage of being able to leverage a lot of dealership data," a spokesman said in a statement. "Companies without the infrastructure to house, secure, and analyze this data may be faced with delivering less-than-optimal targeting."
Andy MacLeay, director of digital marketing for Dealer.com, said Facebook's changes sparked a discussion of how his company will better use its first-party data. But he said there's a place for third-party providers as well.
"Not all of them are out there looking to cause trouble," MacLeay said. "Many of them are there with honest data segments. At Cox Automotive, we're in a really good spot because we can provide our dealers with that first-party data."