New Facebook Marketing Tool Chews Up Data, Spits It Out

Facebook last week launched Topic Data, a new service that reveals to advertisers the subjects users discuss, the brands and products they use, and the activities they follow.

Marketers will be able to sift through data compilations of what users say about events, brands, subjects and activities. Facebook’s 1.3 billion users can not choose to be excluded from the mix — but their data will be anonymized and aggregated to protect their identities.

Facebook has partnered with DataSift to provide an application programming interface for delivery of data analyses.

Topic Data results currently are available only to businesses in the U.S. and the UK, and DataSift is accepting requests from companies interested in using the service.

Better Info for Better Ads

“This is the first time that anyone other than Facebook can look at this data — anonymously and in aggregate — to get a pulse of the things people are sharing and commenting on Facebook,” said spokesperson Tim Rathschmidt.

“Marketers will now be able to see the things people are interested in on Facebook and use that to inform their marketing and product development,” he told the E-Commerce Times.

The more relevant ads are to people, the better experience they have on Facebook, he added, “so providing marketers with the tools to make ads relevant and interesting is a priority for us.”

How It Works

In essence, DataSift first accesses the social network’s pipeline of anonymous and aggregated information. Then it organizes that data for its partners to see.

Those partners then analyze the data and convert it into something they can use to gain insights to support marketing decisions and product development.

Facebook users’ data has been available previously, though more limited in scope. Sample sizes were much smaller and demographics were not clear.

Topic Data groups data and strips personal information from Facebook activities to offer insights on all the activity around a topic. These results give marketers a holistic and actionable view of their audience for the first time.

A business that sells hair products, for example, could use Topic Data to see demographics on the people talking about humidity’s effects on their hair. Or a clothing retailer could see the fashion items discussed by its target audience to decide which products to stock. Manufacturers could get insights into consumer sentiment regarding their brands.

Topic Data provides tools to fulfill a previously unmet need. It offers an avenue for companies to explore trends that are being discussed and shared among Facebook users.

“Since Facebook has not provided a third party managed service of this kind in the past, it could provide a treasure trove of consumer opinions that would be of interest to businesses and advertising organizations,” noted Charles King, Principal Analyst at Pund-IT.

Social Media Pays

Facebook benefits from Topic Data in two ways. Presumably, the company gains financially from the Topic Data service itself. In addition, Topic Data customers are likely to buy advertising on Facebook that will attempt to leverage the insights they gain, King told the E-Commerce Times.

However, as Facebook’s marketing tools become increasingly sophisticated, users face potential pros and cons resulting from marketers’ use of their online exchanges. One benefit to users could be having companies become better attuned and sensitive to their top-of-mind concerns and complaints.

The most significant disadvantage regarding Topic Data, from Facebook users’ perspective, is that they have no say in whether or how their information is used, since opting out is not possible.

However, in addition to its reassurance that all data will be anonymized by DataSift, Facebook has promised that Topic Data responses will incorporate information from no fewer than 100 Facebook users, noted King.

That said, “this is a situation that clearly reveals Facebook’s business model — one where users create and qualify as the gold that the company mines for its own profit,” he remarked.

All About Data

Topic Data gives marketers a deeper understanding of the conversations people engage in on Facebook than previously was available to marketers.

“We are working with Facebook to enable developers to build innovative marketing applications based on topic data,” said DataSift CEO and founder Nick Halstead.

Those applications will help marketers “create more relevant content and advertising,” he told the E-Commerce Times.

From an internal engineering viewpoint, this service has the potential to give Facebook’s efforts to analyze user content — such as status updates and shared images — some forward momentum, noted Metanautix CTO and former Facebook employee Toli Lerios.

“This technology development may eventually drive ad targeting, recommendations, news feed rankings and other aspects of the Facebook platform, even if the Topic Data product does not currently use this technology in these particular ways. In other words, one can think of this service as a proving ground for new tech,” Lerios told the E-Commerce Times.

Risk Factors

Facebook needs to tread cautiously with Topic Data, Lerios cautioned. If taken too far, it could result in Facebook users feeling threatened.

Facebook needs to balance narrow targeting with maintaining users’ trust, he suggested. “Being transparent with Facebook users about what data is being shared and with whom will help alleviate users’ concerns.”