Report: Facebook to match user profiles with offline purchases for ad targeting

Facebook is partnering with data vendors like Acxiom, Datalogix and Epsilon to allow advertisers to match data from consumer loyalty programs with user profiles in order to target ads by offline purchase habits, according to Ad Age.

The social network did not confirm the report or offer any comment, but Ad Age cited an OMD social media director who has been involved in beta tests. The news is also in line with what we have heard from sources familiar with Facebook’s advertising plans, who told us that Facebook would soon introduce new targeting options based on data from outside of the social network.

Last year Facebook began working with Datalogix to measure how Facebook ads affect in-store sales. Datalogix has information from loyalty cards and programs at more than 1,000 retailers. Facebook can then match email addresses or other information associated with those memberships with the email addresses or information associated with users’ Facebook accounts. All emails and personally identifiable information is anonymized, but the companies can compare the differences in sales among groups who saw certain Facebook ads versus those who didn’t. It makes sense that Facebook could also use the matches to create groups for ad targeting.

Many media companies, including DSPs, DMPs, agency trading desks, ad networks and exchanges, already partner with Datalogix and similar companies to target users by offline purchases in a privacy safe way. Most consumers are unaware that this goes on, but when Facebook moves into this area it is likely to face much more scrutiny. Not only is Facebook under a greater microscope, but users feel a personal connection to the service and often worry about who has access to their information and how it could be used. On the other hand, most people don’t think about browser cookies often, and they likely haven’t heard of companies like BlueKai or AppNexus, which already help advertisers target them by their online and offline behavior. Facebook will have to take extra precautions to prevent users from feeling exploited.

The social network has evolved its position on ad targeting in the past year. Instead of having advertisers target their ads only based on information users have added to their profiles, it now allows targeting by first-party data like CRM lists through Custom Audiences and cookies through Facebook Exchange. Now it seems to be letting in third-party data from vendors like Datalogix.

This trend was foreshadowed by a job listing Facebook added to its careers page in August 2012. The job description for a Product Marketing Manager, Monetization says, “Facebook is seeking an expert in data management platforms. This role will develop our plans and vision for how we can enable businesses to better reach their customers and prospects on Facebook.”

Data management platforms help advertisers organize their first party data (web analytics, CRM), second party data (from strategic partners that can match CRM records or cookies) and third party data (such as from Acxiom or Datalogix) to improve their advertising efforts. As we wrote about previously, Facebook is uniquely positioned in each of these areas, and because it can match data to a unique user profile, it has an advantage over other systems, which tend to rely on cookie matching. And with Facebook, advertisers can combine demographic, interest and other targeting to ensure they’re reaching the most relevant audience.

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Arkadium examines the '5 W's of Social Game Purchases' [Infographic]

Arkadium has long been more than just a game developer, as the name behind Mahjongg Dimensions is also interested in the how's or why's associated with social games. This is true once again this week as the company has released the results of a March 2012 survey of over 1,500 gamers that details purchases in social games, along with the reasoning behind why gamers make purchases in their favorite social games.

The survey was made up of mainly players between the ages of 18 and 34, as 61% of players surveyed fell into that age rage. Interestingly, of those surveyed, 45% of men and 37% of women had made purchases in at least one Facebook game (I might have thought it was the other way around). What doesn't come as a surprise are the genres in which most of that money is being spent, with "Simulation and Building" games accounting for 69% of purchases (games like Zynga's FarmVille and CityVille are prime examples of money-makers in that "genre"). Meanwhile, games like Arkadium's own Mahjongg Dimensions, which would fall in the Arcade or Action category, only accounts for 22% of purchases.

While spontaneous purchases might account for a small portion of money spent in Facebook games, most players aren't willing to invest money into a product until they've been playing the game for at least a week. Unfortunately, those purchases sometimes go to waste, as only 49% of players say that they still play every game they've purchased items in after 6 months. Then again, this could be looked at in comparison to $0.99 mobile apps, which are normally abandoned just as quickly (or quicker). At least here, gamers are playing something for free and can come back to the product at any time to find (normally) an incredibly updated experience.

Arkadium's survey results are full of fun factoids like these, and you can find the full infographic below (click on the image to make it larger).

Are your surprised by some of the results of this survey? Have you ever invested real money in a Facebook game? Sound off in the comments.

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Plink rewards consumers’ offline purchases with Facebook Credits

Consumers can now earn Facebook Credits for purchases they make at brick and mortar locations by signing up for Plink, a loyalty program that officially launched on Thursday.

Plink connects offline transactions with people’s online profiles without placing additional onus on consumers or businesses. And because people are rewarded with Credits, businesses do not have to devalue their products through discounts. To reach mass audiences though, the demand for Credits will need to expand beyond social game players. As more goods become available for Credits, Plink can build partnerships with more restaurants, retailers and other businesses.

Facebook users connect their accounts with Plink and register a credit card with the site. Plink then matches users’ purchases with offers they qualify for. Users will receive emails to connect Credits they earn to their Facebook profile.

Plink users can earn Credits when they use their credit card at Taco Bell, Quiznos, 7-Eleven and a few other national chains. For instance, spending $10 at Taco Bell results in a reward of 12 Facebook Credits, the equivalent of US$1.20. Most in-game items typically cost anywhere between one and 50 Credits, but select premium items can be valued higher.

Plink’s biggest selling point is that consumers don’t need to carry coupons or rewards cards. They use their credit card as they normally would and the Credits add up, similar to how people earn Frequent Flier Miles. Members have to provide their online banking credentials when they sign up for Plink, which might turn off some users, but the company provides a disclaimer about how it uses the information and why users’ information is safe.

For businesses that partner with Plink, there is no change to the transaction process so staff does not need to be trained and sales aren’t slowed down, as they are with prepaid coupons or check-in deals. Restaurants and retailers pay Plink a percentage of the sales generated by Plink members.

Film studios and musicians have started to experiment with offering content in exchange for credits, but currently the market is dominated by in-game purchases. If Credits take off like Plink CEO Peter Vogel predicts they will, the company provides a unique way for Facebook users to earn them by taking actions offline.

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