NEWS25 September 2012

Facebook strikes US partnership with Datalogix

North America Technology

US— Facebook has formed a partnership with Datalogix that will enable the social media giant to track whether people who see ads on the social networking site end up buying the relevant products in stores.

The move is the latest in a series of initiatives announced by Facebook to prove the value of its advertising to marketers.

According to the Financial Times, the deal was driven by Brad Smallwood, Facebook’s head of measurement and insights, because “we kept hearing back [from marketers] that we needed to push further and help them do a better job”.

These sentiments were echoed in the UK last week at a conference held by the company to convince retailers that Facebook was a credible place for them to put their advertising. Facebook VP of marketing services Carolyn Everson urged retailers to exploit social opportunities.

“Shopping is the most inherently social category,” she said. “Retail and shopping and how people think about that category has been the most social since it started. It’s an incredibly exciting opportunity to develop brand advocates so we’re striving to make sure that [retailers] understand just how to get the most out of the site’s potential.”

Datalogix has purchasing data from about 70 million American households largely drawn from loyalty cards and programmes at more than 1,000 retailers. By matching email addresses or other identifying information associated with those cards against emails or information used to establish Facebook accounts, Datalogix can track whether people bought a product in a store after seeing an ad on Facebook.

The emails and other identifying information are made anonymous and collected into groups of people who saw an ad and people who did not. Datalogix then compiles a report for Facebook and its advertisers to measure which creative approaches and demographic targeting persuade people to buy specific products offline.

Datalogix currently only has data for US audiences but is working towards launching in other countries. However, the deal has led to calls from the Electronic Privacy Information Center (EPIC) for the US Federal Trade Commission to analyse the deal to ensure it meets the terms of a recent adjudication settlement.

In the meantime, Kathy Dykeman, Facebook head of partner measurement, told Research that Facebook is working hard to maximise opportunities across EMEA for brands across sectors to monetise Facebook better.

“We realise that there needs to be better opportunities in the area of social measurement and have enhanced the level of online engagement information our partners can give [retailers] to understand consumer behaviour and spending patterns better,” she said.

“More does still need to be done – and will be done – to ensure that firms can capitalise on social media in a much more efficient and effective way.”