Why Facebook’s new tech is not actually new
Facebook made some waves this week with the introduction of their new Atlas feature, which in combination with their News Feed and internal database of user data, allows advertisers to track the effect their online ads are having offline.
Here’s how it works: advertisers run ad campaigns on Facebook and supply encrypted customer and purchase data. Facebook then cross-references with the user profile data they have access to, as well as with offline purchase data acquired through external data sources, tracked by identifiers like email addresses and phone numbers. Facebook can then provide reports and analytics to measure how customers responded to ads, even if those ads weren’t on Facebook, by bringing all that data together.
Pretty impressive, it’s true; especially the part about Facebook being able to track the effectiveness of ads that are not shown on Facebook. Because their platform’s reach is so wide – 1.35 billion active users and counting, remember – they are able to link email addresses and other identifiers to track their users across a wider scale by bringing in third-party data collection.
But revolutionary? That’s more of a stretch. This is a variation on an existing theme – an admittedly advanced variation, but a variation nonetheless. The technology that allows tracking of offline purchases from an online touchpoint is hardly new. The idea that email addresses and other customer data points are constantly being collected and stored with the potential for use in tracking or predicting customer action is again, hardly new.
Not to toot our own horn, but we at Retention Science are pretty familiar with using data to understand customer action. We’re not in advertising, nor are we on Facebook’s level in terms of reach – but the application of data tracking is the same in many ways.
For example, we power campaigns for Target’s Cartwheel App, which provides personalized offers and coupon codes that shoppers can redeem online or in-store. These codes, regardless of where they get used, eventually come back to us, where we can then provide our clients a better understanding of which tactic or campaign had the best impact. Put simply, the idea that there is a trackable correlation between online interaction and offline transactions is not new at all – in fact, it’s a given.
Which begs the question: why is this news?
Yes, the Atlas feature opens doors for advertisers. But these doors have always been there, and have been, for the most part, left unlocked. The difference is that people now want to know what’s been behind all these doors after all this time.
One reason for this might simply be that for a lot of “new” ideas, it takes a big name to make a big impact. Social media was alive and well before brands like Pepsi tried out Twitter as an advertising tool. MP3 players existed years before Apple’s iPod changed the industry.
But what it really boils down to is timing. E-tail and retail have been on a collision course for the last few years, and we’re now standing at that intersection. E-commerce has shown tremendous growth in the past few years: look at the data from Thanksgiving sales, where online and mobile purchases increased even as overall sales dipped. But even more significantly, online traffic now translates into in-store traffic, or lack thereof; “showrooming” and “webrooming” are actual things. It’s becoming clearer than ever that what people do online directly relates to what they do offline.
More importantly: advertisers have noticed.
Think of it this way: until recently, e-commerce has largely been considered a separate, contained world from in-store retail. Mobile and social commerce, known as m- and s-commerce respectively, have been considered even smaller offshoots.
Not anymore. E-commerce, and m-commerce, and s-commerce, and regular old commerce – we’re now at the stage where growth in one area affects all areas. Increase in mobile traffic has direct correlation to online purchases and in-store purchases, thanks to people who browse online as they browse offline. Social commerce brings in referrals that translate into revenue for online stores, and is growing towards bringing in revenue via social channels alone. Online shopping affects and influences offline shopping. The world is omnichannel, whether you’ve been keeping up with the times or not.
This is what advertisers are now realizing: the cornerstones of online commerce and advertising, like big data and analytics, apply to offline commerce and advertising. What seemed like slightly obscure tech-speak is now relevant, and in a big way.
So Facebook’s new feature allows advertisers to track how shoppers behave online and offline by tracking their behavioral and transactional data? We say: well, yeah. But hey, everyone is welcome here at the Big Data club. Pull up a seat. There’s a lot to review.