Facebook is working with a data mining company called Datalogix to help advertisers understand how well their Facebook ads are working. Facebook bought data on 70 million U.S. households from Datalogix. Datalogix goes through information from loyalty cards and programs across 1,000 retailers and then matches e-mails and data associated with those cards and programs with e-mails required to set-up a Facebook account. Using this information, they are able to say whether the consumer bought an item after seeing it advertised through Facebook.
Brad Smallwood, the head of measurement and insights at Facebook, said that Datalogix and Facebook tracked 45 campaigns. They found that in 70% of these campaigns, a dollar spent on Facebook led to $3 in sales. Brands that target users on Facebook are able to track them even if they have not “Liked” their brands.
Facebook’s partnership with Datalogix is controversial because privacy investigators are looking into whether this violates a $9.5 million settlement with the Federal Trade Commission regarding privacy practices.
Below is a statement that Facebook made as quoted by Mashable:
We are working with Datalogix to help advertisers understand how well their Facebook ads are working. We also do this through our partnerships with companies like Nielsen and comScore and through our own advertising tool. We know that people share a lot of information on Facebook, and we have taken great care to make sure that we measure the effectiveness of Facebook ads without compromising the commitments we have made on privacy. We don?t sell people?s personal information, and individual user data is not shared between Facebook, Datalogix or advertisers.