How Facebook’s Transparency Updates Will Change How You Advertise
If you've turned on a TV or picked up a newspaper in the past 6 months you've no doubt seen a headline about Facebook Transparency. In the wake of the 2016 Elections and the Cambridge Analytica scandal, everyone is talking about what Facebook is doing to tell its users why it's seeing an ad. We LOVE transparency at Black Cat, it's a tenet we built our business on, but we've also been receiving a lot of questions about how this will impact advertising for brands who aren't trying to influence elections. We rounded up the most common questions we've heard and answered them for you.
What can my customer see & what are they told about why?
The main result of increased transparency is the user's abilty to understand what actions they took or information they have provided that resulted in being included in a target segment. Some potential reasons for seeing an ad a user may be told include their Facebook activity, visits to a company’s website or even their current geographic location. Although the information is still somewhat generic, this information is more than users previously knew about why they saw an ad. Along with seeing why they were served an ad, your customers can now see all live ads you are running on both Facebook and Instagram.
How do users find more information about the ads they are seeing?
Users have two ways of finding more information about ads a company is running, "Why am I seeing this? option from the ad directly and "Info and Ads" tab on a company's Facebook page.
When a user is presented an ad on their newsfeed they will now have the option to select directly from within the ad why they are seeing the ad. A popup will provide reasons that may have caused the user to be included in the advertiser's target segment. Users will also have the ability to update their Ad Preferences from this pop-up.
Users can also see all of the company’s live ads from the ad preview tool regardless if they were presented the ad or not. To see all ads a company is running users can selec the ‘Info and Ads’ tab from a company's Facebook page.
How do I maintain trust with my customers while still being able to create target segments?
Segmented groups are critical to the performance of a marketing campaign and more importantly to the user's experience. As a female shopper, I do not want to be shown ads for men's clothing. As an advertiser, being aware that customers are now seeing all of your ads without context of who you are targeting may impact the creative you choose for a given campaign. Take the extra time to think about how your ads will be precevied when choosing the image and writing the copy helps solidify that trust regardless of who the target segment for that ad is.
Facebook is also taking steps to ensure their targeting is trusted and understood by users. A major steps they’re taking is phasing out all public and private third-party Partner Categories (data brokers). Some examples of the information that these third-party Partners provided to help advertisers build target segaments include the user's automobile make, estimated household income and even as granular as being a dog owner. This means that advertisers will only be using Facebooks targeting segments
Facebook now requies advertisers to have user consent before uploading any customer information (Name, Email, etc) to their Business Manager account.
According to Facebook's upload policy:
“...advertisers represent and warrant that proper consent has been obtained for the information they upload in Business Manager to create Custom Audiences, and enables them to grant appropriate permissions to service providers.”
Uploading customer information will not negatively affect the majority of advertisers, but advertisers will need to indicated the origin of the customer data to Facebook, whether the information was collected directly from people, provided by partners or a combination of the two. Advertisers who are honestly collectingcustomer infomaiton should have not impact at all. This new policy, however, helps users know that
If you’re worried about your competition seeing your ads you’re not alone. Sheryl Sandberg, Facebook’s chief operating officer, said in June of this year that while some businesses were concerned because it’s now “easy for their competitors to see the kinds of ads” they’re running on Facebook and its related services, “the majority of them were very positive and were understanding of why we want the platform to be more transparent.” Not everything about the increased transparency is a positive. We pulled together the top pros and cons of the heightened transparency for both brands and users.
You are able to see you competitors ads and landing pages.
Transparency builds trust with potential and current customers.
Competitors not following Facebook's advertising policies will eventurally need to stop advertising on the platform due to high ad costs. The high ad costs are a rsult of low total value score compared to competitors.
Competitors can see your ads and landing pages.
Users are removing some information from their profiles that Facebook uses to build target segments.
Promotions offered for a specific audience will be visible to all who visit the the “Info and ads” tab on your Facebook page, potentially impacting budgets.
Users are able to see how they are being targeted and what ads are being show to other segments by any brand. This can build trust for users.
Facebook has stopped third-party company's access to user information to build target segments on behalf of company's running ads.
The stricter ad policies will help remove advertisers from the platorm who don't have the best intentions, improving the overall user experience with ads.
The owness remains with the user to click-thru to various pages to find information.
The quality of ads a user sees may decrease as they remove information from thier profile. Less information makes it harder for marketers to find them and present them with ads they would want to see.
Facebook will likely continue to update their policies and pages meaning users will have to continue to stay up-to-date with changes.
Will transparency change the cost of running Facebook ads?
Facebook has not directly passed the cost to become more transparent to its users or its advertisers as of yet. The cost structure to advertising on Facebook was designed as an auction format. With limited ad placements, businesses are bidding against one another to be seen by their desired audiences (this is why your CPM and CPC are always changing). As consumers become more aware of why they are targeted, they have the opportunity to remove information from their profile that Facebook uses to identify them in a target segment. Ultimately, less available information means a reduction in the number of people in a given audience available for advertisers to reach. As this happens, advertisers should expect the overall cost to acquire a new customer to increase. On the flipside, some advertisers may decide they don’t want customers knowing who they target, competitors to see their ads, or worry that audience sizes won’t be big enough and choose to halt running ads all together. With fewer competitors’ bidding on an audience, costs could decrease. Only time will tell what the financial impact to advertisers will be as a result of increased transparency.