"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Don Mathis, CEO at Kinetic Social.
Although some predict that Facebook’s salad days will soon end, brands shouldn’t believe it.
The company remains on the forefront of the digital revolution, from virtual reality and artificial intelligence to rapid and creative global expansion of Internet availability. At the same time, Facebook’s infrastructure continues to create an entirely differentiated way of digital marketing that is measurably superior to the deeply flawed cookie-based ad tech stack.
This last development should attract the focus of marketers everywhere, yet few appreciate Facebook’s value as a platform for data-driven audience targeting. Advertisers should no longer think of Facebook as just the social media publisher, but rather Facebook Inc., a unique and massive consumer brand and data-management platform.
Facebook is a platform spanning multiple properties including, but not limited to, the massive social network that allows advertisers to connect with and learn about their customers as real people, increasingly all over the Internet. Unlike other publishers, Facebook is not limited to the core social property’s 1.4 billion visitors.
Astonishingly, Facebook continues to be viewed as a glorified publisher as marketers still ask, “So what happens if Facebook’s users leave en masse for the next hot social property?”
But they’re missing the point. A more important revelation is that even if there is a decline in the core social media property – unlikely as that is – it won’t really matter. Even putting aside the other properties and audiences that Facebook owns, including Instagram’s 300-plus million users, WhatsApp’s 700-plus million users and Messenger’s 600-plus million users, the data it has collected, combined with the infrastructure it has built for creating an ongoing interchange of data and marketing, renders the question meaningless.
Facebook passed the tipping point from cool Internet destination site to data-driven platform titan many moons ago.
Advertiser Choice
In the past, Facebook played along as the industry turned toward programmatic, launching FBX, an RTB exchange, in 2012. The excitement around programmatic was so pervasive that some observers predicted the decline of Facebook’s proprietary ad systems, suggesting that the digital open web had forced the company to relent in its “walled-garden” philosophy.
But it didn’t play out that way. Facebook has been slowly rolling back “traditional” ad technology methods in favor of an approach that directly connects to the company’s data. Facebook’s recent decision to decertify several of its FBX partners is just the tip of that spear. Instead of FBX, Facebook is emphasizing its website custom audiences product (WCA), which leverages its own massive data trove, derived from people sharing their own information, as well as marketer data.
Advertisers that take advantage of WCA are explicitly choosing to be advertisers on Facebook, within the Facebook Inc. ecosystem, and, in some cases, beyond the company’s walled garden entirely by using tools like Audience Network.
Compare this with a classic RTB approach using FBX, where an advertiser and its ad tech partner spray cookies and chase matches everywhere, hoping for a click. Facebook believes that its data is better than any other third party, and will therefore drive higher performance. While we’ve seen some publishers leverage their internal data in private ad exchanges, Facebook’s move is different in that it eschews the cookies of other parties and bets on its massive data set.
Facebook’s Data
The quality of data available from the Facebook ID is a vast improvement over the alternatives, and the growing reach makes it increasingly useful well beyond Facebook itself. A traditional browser cookie can tell the advertiser if a shopper abandoned their shopping cart or recently visited a travel site. In comparison, Facebook ID knows what consumers like, what their friends like, where they go and much more. At the same time, Facebook ID protects consumer anonymity.
Within the Facebook ecosystem, the advertiser is immunized against the ills that plague much of the open web, such as bot fraud and viewability. Facebook’s native impressions are generally only served when they fall in-view. Only real humans can log into the site. Contrast that with the bot traffic and viewability issues that plague the cookie-based ad tech stack, where reports range from 20% to 40% of ad spending is wasted because no human consumer ever sees the ads.
Increasingly, Facebook plays everywhere. It wants to solve the problems of the Internet, and one of the biggest problems is the cookie. Its drive to become a data-centric platform company with multiple consumer properties built on an infrastructure leveraging the Facebook ID represents a deconstruction of the cookie-based architecture. It is a push toward a new approach to digital marketing.
There’s no bigger threat to the incumbent open web advertising technology stacks than the loss of the cookie, and no one today is in better position to replace the cookie than Facebook.
Follow Don Mathis (@KineticDHM), Kinetic Social (@KineticSocial) and AdExchanger (@adexchanger) on Twitter.
