Facebook, Youtube, Instagram, and many often-used and well-loved programs and apps are free to use thanks to data sharing. We’ve all seen the misinformed memes that say something along the lines of “share this post by midnight so you can keep your free account!”
Those are almost always fake. Most of these platforms have been free to use for quite a while and will likely remain that way.
Here’s why: Ads.
In this post, we’re going to cover a bit about why platforms track our activity, and what data sharing is used for. We won’t get too far into the weeds of how much tracking is too much, or anything like that. My goal is to unpack some of the positives that may sound intimidating, but are actually very helpful and can be used to grow small businesses.
As Mark Zuckerburg, the founder of Facebook mentions during a senate hearing (which has since become one of my favorite GIFs), most of these platforms stay free-of-cost by generating revenue through advertising on the platform.
Ads are often pesky. We all probably think that. You’re watching a funny video on Youtube, then all the sudden, you’re met by yet another Febreeze ad.
A lot of large businesses use advertising as simple brand-awareness canvassing. They’re letting a ton of people know about their product all at once. Usually this is most helpful for brands that have a product that pretty much everyone uses. For instance: A phone service, a cleaning product, or food.
On the other hand, smaller businesses, and brands with a very specific product have to work much harder to reach exactly the right people. You don’t want to show an ad about an automated packaging machine to a suburban couple binging a Hulu show while the kids are asleep.
That’s where the tracking comes in handy.
What the IOS 14 update looks like:
Typically, most platforms will track some level of off-platform activity. Here’s what that means:
If you’re logged into Facebook, and also view a cat toy website in another tab, you will likely receive ads on Facebook afterwards for cat toys and other pet-related products. This is because Facebook is keeping a log of what kind of content you’re interested in, even when you’re not using the platform.
If you use an iPhone, and recently updated to IOS 14, you probably received this message:
That doesn’t mean they’re keeping your account and routing number, but they probably know you bank with Chase, or at least were on the Chase Bank website recently.
In a sense, Facebook now knows a bit about your financial life, and that sounds scary at first. But on the other hand, I’d tell anyone what banks I use. Especially if they were going to tell me their opinion about that bank and if there were other financial options that might also help me.
That’s what small advertisers are able to do by using this data. Advertisers can’t see information about YOU directly, but they can let Facebook use this information to serve you ads.
How data sharing helps advertisers:
If I’m serving an advertisement about a cat toy, I probably don’t want to serve the ad to people that DON’T have cats. If Facebook knows that you spend a lot of time on pet-related websites, that’ll help me. Then I can serve ads to people that are more likely to have pets. This will save me money by helping me reach the right people faster.
Furthermore, Facebook and other platforms allow advertisers to create what’s called a “lookalike” audience based on key metrics critical to an ad campaign’s success. This can range anywhere from website views, to purchases or subscriptions. If I’m advertising a customized cat collar with your cat’s name on it, then I could serve my ad to people that have recently viewed or even bought similar customized cat items.
Opting out of tracking limits this a bit.
I prefer that Facebook knows more about me. My news feed is filled with advertisements about advertising. Either that, or wedding resources and music resources, because I’m a musician and I’m getting married this year.
I like having my ads customized – it lets me see more options that are relevant to the things I do with my life!
So what if people do opt-out of tracking anyway? With the recent IOS 14 update, we’re seeing more people choose NOT to be tracked. This is certainly not helpful for advertisers.
What we can do to better target audiences after the IOS 14 update:
There are a few tools that are available to lock in better targeting, even when users opt-out of data sharing. Facebook has introduced aggregated event measurement with verified domains, which means a few extra steps for advertisers. I won’t get into the details of how this works, but the important thing to know is that if you’re actively running ads, you need to do it. If you need help, get in touch, or check out this Facebook article.
Beyond this, there’s at least one other strategy that can be used to dial in the relevance of ads on Facebook and Instagram. During a recent call with a Facebook ads rep, we discussed the strategy of simply using video any time you’re introducing someone to your brand.
Why you should use videos in your ads:
If you decide to limit Facebook’s tracking of your activities off the platform, the most valuable data Facebook still has about you is your activity ON Facebook. When a new user is introduced to your brand with a video, there’s a change for Facebook to find out how interesting the video is.
For instance:
If you reach 100 people with an image ad and 2 people click it, Facebook only has a small amount of information about who was interested in your ad – and if their tracking is turned off, then they have no information other than the fact they they clicked it.
If you reach 100 people with a video, there may be 30 people that saw 3 seconds of it, 10 people that watched 25% of it, 5 people that saw 50% of it, 1 person that watched the whole thing, and 2 people that clicked. That’s a lot more data with the same ad spend!
This means two things:
- Facebook can now more quickly find more users similar to those people that watched a significant portion of the video, or at least SOME of the video.
- You can retarget these users. No matter what tracking options they are opted-into, the activities these users make on Facebook are still useable for ad targeting. If they watched 50%-75% of your video, you might want them to see another few ads that give them more reasons that your product can make their life better!
In conclusion:
I hope this helped to understand a bit more about what platfoms use data for, and why it’s helpful for advertisers.
Advertising is just math. If you’re running ads, make sure you’re finding ways to maximize your ability to learn who actually cares about your advertisements and using data sharing to find more people that your product can help!!