Party’s Over: Facebook Finally Closes The Door on Third-Party Data

By Lana Clark | Published September 27, 2018

When Facebook announced the end of third-party data back in April of this year, October felt so far away. Now it’s the end of the road for Facebook’s managed Custom Audiences program and small to medium-budget advertisers will feel it the most.

Why? The answer’s simple. Data is expensive, and companies that partner with data providers like Oracle and Experian pay handsomely for the pleasure. In the past, smaller businesses couldn’t afford to buy into that game.

Through the Custom Audience program Facebook essentially aggregated its advertisers’ budgets to create buying power. The result was a win for everyone: Budget advertisers had access to more sophisticated audience targeting without spending more *wink* on the front end, and Facebook had more advertisers than ever before making a fast break to use their advertising platform. It was also a win for data providers. They received a percentage of all ad spend utilizing their data to the tune of 15%.

After news of Facebook’s data platform being manipulated for political gain during the 2016 US presidential campaign by Cambridge Analytica and others, Facebook announced its about-face. And just like that, the party was over for SMB advertisers. Now, this ability has been removed, but the cost of campaigns has not been reduced. In spite of Facebook no longer paying data providers fifteen percent, in many cases, the cost of running Facebook ads has increased.

Let’s say you were a women’s shoe manufacturer who specializes in occupational footwear. Using the Custom Audience program, you could have not only targeted “nursing professionals” and segmented them by demographics like age and location. You could have drilled down further into what car they owned, what tax bracket they fell into or even what other brands they supported. Now, advertisers’ access to data is limited to information they have collected on their own and information users have shared with apps and developers.

And using that data is now subject to authentication – which it probably should have always been – because of lawsuits.

Without the Custom Audiences Program, companies looking to advertise on Facebook could possibly be forced to spend more money to attract a less targeted audience.