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Facebook Cuts Third-Party Data Providers From Ad Targeting

Apr. 03, 2018 8:15 AM ETMeta Platforms, Inc. (META)RAMP, EXPGY35 Comments
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  • FB is expected to cut third-party data providers from ad targeting.
  • This could hurt advertisers' ability to effectively target Facebook users. Third-party data providers could become FB competitors.
  • FB is also expected to block fake accounts which could hurt MAU growth.
  • Such moves could negatively impact revenue or reduce the value of FB's social network.
  • Sell FB.

Source: The New York Times

Facebook (FB) is in the midst of a public relations firestorm over who has access to its user data and how they use it. The company has now decided to stop using third-party data providers like Experian (OTCQX:EXPGY) and Acxiom (ACXM) for ad targeting:

Facebook says it will stop using data from third-party data aggregators — companies like Experian and Acxiom — to help supplement its own data set for ad targeting.

Facebook previously let advertisers target people using data from a number of sources... Facebook confirmed the move in a statement attributable to Graham Mudd, a product marketing director at the company.

”We want to let advertisers know that we will be shutting down Partner Categories,” Mudd said in the 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.”

The decision comes after Cambridge Analytica, a political consulting firm in the U.K., did digital work for Donald Trump's 2016 presidential campaign and allegedly used Facebook data to target voters.

Could It Impact Revenue?

In deciding to stop using third-party data providers, Facebook did not divulge [i] the amount of revenue it generates by aggregating data from third-party data providers or [ii] how much of the ad dollars it shares with companies like Experian or Acxiom for the right to supplement their data with Facebook's. Recode implies Facebook receives ad money for the bundled data and gives some of it to third-party data providers:

Data from third-party services like Experian, which can collect offline data such as purchasing activity, that Facebook uses to help supplement its own data set. When marketers use this data to target ads on

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The Shock Exchange has a B.A. in economics and MBA from a top 10 business school. He has over 10 years of M&A / corporate finance experience. Currently head the New York Shock Exchange, financial literacy program based in Brooklyn, NY.His book, "Shock Exchange: How Inner-City Kids From Brooklyn Predicted the Great Recession and the Pain Ahead", predicted pain ahead for the U.S. economy and financial markets.In 2014 the law firm of Kirby, McInerney, LLP brought a class action lawsuit against Molycorp, Inc. for "materially misleading statements" in its financial statements. Kirby, McInerney used investigative journalism from the Shock Exchange to buttress its case. That's the discipline the Shock Exchange brings to every situation he covers for SA.

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