In an attempt to give advertisers more information about the effectiveness of ads, Facebook has partnered with Datalogix, a company that "can track whether people who see ads on the social networking site end up buying those products in stores," as The Financial Times's Emily Steel and April Dembosky explain. Advertisers have complained that Facebook doesn't give them any way to see if ads lead to buying. This new partnership is their response. The service will link up the 70 million households worth of purchasing information that Datalogix has with Facebook profiles so they can see if the ads you see changes the stuff you buy and tell advertisers whether their ads are working. Up until now, the social network has been limited to only tracking your Internet life (on and off Facebook.com) with its ubiquitous "like" buttons, but as promised, the future of Facebook is more focused on data, including tracking our offline habits.
Specifically, Datalogix gets its information from retailers like grocery stores and drug stores who use loyalty discount programs to amass careful records of what their customers are buying. Datalogix's site doesn't list its partners, but from a Google search, it looks like the company has worked with CVS's ExtraCare card program.
As the Financial Times puts it, Facebook, after matching the email addresses and other identifying information in the Datalogix databases to Facebook accounts, will be using Datalogix to prepare reports for its advertisers about who, if anyone, bought more of their stuff after they ran ads on the social network. But by matching your Facebook profile with your CVS bill, this means that Facebook has the potential to know some of your most intimate details (my, that's a lot of bunion cream you're buying!), and the privacy concerns are enormous. When DoubleClick attempted something similar to this, user-backlash ultimately led them to cancel the project.
Facebook has put some privacy protections in place to head off a similar reaction. The social network says it will be anonymizing each profile, applying a hash to each Facebook account in lieu of a real name. And it also offers the option to opt-out — sort of. There is nowhere on Facebook's website to opt-out. Instead, users have to go to the Datalogix website -- which most of us probably had never heard of until right now — and opt-out of their tracking. Facebook claims the partnership doesn't violate Federal Trade Commission regulations because it has a link to that option on its site in the help center.
But finding the link on Facebook requires a lot of digging. First, you have to find the help center, which involves first clicking help, under the home tab. Then, that will give the option to go to the help center. After clicking through to Ads and Business solutions, then to Ads and Sponsored Stories, then to Interacting with Ads, you will finally see a list of questions about ads as it effects you. Way down at the very bottom (pictured below), where it says "learn more about the partners and choices they offer" is a link to Datalogix, which leads to this page, where about half-way down under "choice" there is an opt-out link. That is a lot of clicking. To avoid all that, you can just click here to get to that Datalogix page, or here to opt-out.
That may meet legal standards, however, it isn't enough for some. "We don't believe any of this online-offline data should be used without express consumer approval and an opt-in," Jeff Chester, executive director of the Center for Digital Democracy told Dembosky and Steel. Though Chester wants an opt-in button, perhaps Facebook should start with an easy to find opt-out button, on its own website, first.
Update 5:38 p.m.: Facebook insists that when it gets the information from Datalogix it is completely anonymous and that they are only using the data to aid advertisers. Here is the official statement from them:
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.