Bringing first and third party data aggregators into the fold is only the latest in a series of steps Facebook has taken to recreate innovations in online advertising from the past decade. Those explorations have included display ad formats, retargeting (through the Facebook Exchange), lookalike modeling, and database matching through the Custom Audiences program. Custom audiences, sometimes treated by the business press as a dramatic evolution, has actually been employed online for at least the last ten years (first on AOL, later on Yahoo and other sites). It has not yet cracked the search nut, but appears intent on doing so through its Graph Search product. Another stone still unturned is video advertising, but a recent analyst report published by AllThingsD suggests it may be on the verge of doing so.
The program expansion rolls out next week with select partners in the U.S. All Facebook ad types are available according to a representative, including right nav ads and placements in the news feed.
Facebook shared results two marketers have seen during the first six months of the Custom Audiences program. It said Chicago car dealer Castle Auto Group saw a 24x return on ad spend by combining Facebook Offers ads with in-house car leads using CRM matching cpapability. Hong Kong game developer KingNet meanwhile saw a 40% decrease in cost-per-install for one of its games.
As usual with its data-enhanced ad products, Facebook is going out of its way to emphasize the privacy protections. In a post on its Facebook and Privacy page, it emphasizes user profiles are hashed both on its own and the data provider's end, resulting in anonymous audience clusters associated with no personally identifiable information.
Facebook users who hover over ads targeted using data from third party providers will be notified what is happening. And Facebook plans to provide opt-out links to all four partners.