Wednesday, September 26, 2012

From Walls to Malls: Facebook Now Tracking Your in-store Purchases

Image representing Facebook as depicted in Cru...

Those with Orwellian privacy issues towards online ad-giant Facebook should look away now.
Facebook has teamed up with Colorado-based database marketing firm Datalogix to track what Facebook users are buying in-store.
It works like this; Facebook sends (anonymised) lists of its users along with the Facebook ads they have been shown to Datalogix who reconcile the lists with CRM purchase data from 100m+ individuals from 1000+ retailers (US).

This (sort of) allows Facebook to report back to advertisers that ‘people who saw ad for product x were y times more likely buy product x’ and invite them to make the logical fallacy misstep of concluding that FB ads drive sales (did you know that if an ambulance arrives at an accident you’ve been in, you’re far more likely to die?)
Indeed Facebook reckon that the Datalogix data shows that for every $1 spent on FB advertising, $3 in additional sales are generated, which means if you’re making 20% profit after costs, you’re only losing 40c for every dollar you spend on FB advertising. Of course, advertising ROI is a minefield and such models should be taken with a truck-load of salt.
Anyhow, we’re not sure this will help the cause of FB advertising – privacy-concerns are already rearing their head.  The FB advertising cause would be better served if FB simply publicly benchmarked click-through rates against Google.  That way we’d know if the Emperor has any new clothes.


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