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Facebook Pulling Back The Amount Of Third-Party Data Sharing

Facebook, in an effort to quell some of the backlash since it revealed its latest data scandal with Cambridge Analytica, is limiting the information it shares with third parties that turn around and sell the data to advertisers.

In a blog post, Graham Mudd, product marketing director at Facebook, disclosed the new move, saying the social media giant will shut down Partner Categories. “This product enables third-party data providers to offer their targeting directly on Facebook. While this is common industry practice, we believe this step, winding down over the next six months, will help improve people’s privacy on Facebook.”  Meanwhile, The Wall Street Journal, citing people familiar with the matter, reported that Facebook is also stopping a practice in which it provides data that is anonymous from its platform that is used to measure the effectiveness of ad campaigns.  Facebook is trying to come up with ways to share data with these third parties that are more secure so that they can still measure the performance of ads. It comes at a time when advertisers increasingly want proof that advertising on Facebook actually works.

The measures will impact data brokers including Acxiom and Oracle Data Cloud, which gather information on consumers shopping habits on Facebook, noted The Wall Street Journal. The changes are part of a broad internal review of how the company handles the data it collects on its more than 2 billion active users. One person told the WSJ that Facebook is looking into its relationships with these data brokers because it is worried about how the firms get the data and the accuracy of it. Acxiom told the WSJ that the move on the part of Facebook will result in fiscal 2019 revenue and profit that is reduced by as much as $25 million. “Today, more than ever, it is important for businesses to be able to rely upon companies that understand the critical importance of ethically sourced data and strong data governance,” Acxiom CEO Scott Howe said. “These are among Acxiom’s core strengths.”

Limiting Facebook’s relationships with data brokers could restore some of its reputation, which has been taking a big hit in recent days after it was revealed Cambridge Analytica accessed data on 50 million Facebook users without their permission — but it could hurt its relationship with advertisers. After all, it would remove information that helps marketers target ads. The impact, noted the paper, should be limited because the data on its own is very valuable. What’s more, lots of marketers have their own data they upload to Facebook, which won’t be impacted by the pending changes.

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