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Custom Audiences Changes Are A Peek Inside Facebook's Advertising Policy Struggle

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Facebook has been going through some trouble lately. I should specify, though, that they've been going through some trouble with the media and and governments, but their user-level and business-level metrics are strong. 

For a while there though, Facebook was in an in-between period post-Cambridge Analytica when lagging indicators like usage and revenue weren't available to assess the impact of the very immediate and visceral media and government onslaught. During that in-between period, Facebook acted quickly and boldly, announcing a number of policy and platform changes -- both user-facing and advertiser-facing -- designed to increase trust and confidence in the company. 

Some of the changes were widely talked about, like ending support for Partner Categories and other changes to how partners and developers can use, extract, and augment Facebook user data. There were other major, but less talked about, changes as well though. One of those was a major update to the Terms for their Custom Audiences advertising product. 

Custom Audiences Drama

Custom Audiences are a way for advertisers to use non-Facebook data about a list of people -- think Name, Geo, Phone, Email, Mobile Advertiser ID, Age, Gender, etc. -- and use that info to to match people in that list to users on Facebook. Those matched lists (the Custom Audiences) can then be used as an inclusionary or exclusionary targeting audience in an ad set, or as the foundation for building a lookalike audience. 

The use of the Custom Audiences ad product was, like many things on Facebook, governed by a set of Terms. The old Terms basically just said, "Follow the law, if any even apply." Then on April 4, 2018 Facebook published an update that drastically changed things. Facebook how had actual rules, independent of the laws, limiting who could be included in a Custom Audience and where the information about those people could be sourced from. 

In line with their other restrictions about the use of third-party data, the new Terms said advertisers could only use that advertiser's first-party data, going as far as to say that if an agency was including executing ads on behalf of an client, the agency couldn't even supplement the advertiser's data with any data the agency owned. Serious stuff. 

The Effective Date for these changes was set at May 25, 2018 -- GDPR day. But since those Terms weren't in any way GDPR compliant it seems like using that date was more about camouflaging panic with compliance.

Walking Things Back

But in the era of the 24-hour news cycle, April 4 and May 25 are a long way apart. One 24-hour period that was evidently quite a game-changer for Facebook was April 25, 2018. That was the day they released their First Quarter 2018 Results. They showed strong year-over-year Daily Active User and Monthly Active user growth, and incredible year-over-year revenue growth. Facebook was so giddy they threw in an extra $3 billion on their planned $6 billion stock buyback program. 

That was also they day they, very quietly, re-updated (or, perhaps more appropriately, un-updated), their Custom Audiences Terms. The newest Terms, still set to go into effect May 25, rolled back the most significant advertiser limitations. Advertisers could again use third-party sourced and augmented data. It was basically a return to, "Follow the law if there even is one." The only  real change was that if your source list included proprietary Facebook identifiers, those values had to have been obtained directly from the data subject. That limitation doesn't apply to any other type of identifying information. 

So, what does this mean? To me, it means that one solid quarterly report was enough to convince Facebook's executives and board that this whole privacy hullabaloo was a bit of a tempest in a tea cup. That while showboating legislators and click-crazed media were going to -- well -- act like showboating legislators and click-crazed media, everyday people really don't care about tracking or privacy. So while Facebook has said a lot of comforting things in the last few months, don't expect a lot of meaningful changes. 

Aaron Grote