Facebook's move to block third-party data providers from its advertising platform limits what companies know about users' shopping habits – and renders an industry of personal information brokerage less effective.
But industry insiders say that the move is mostly about optics, and could actually increase Facebook's control over the data that advertisers rely on to target customers, putting Facebook more firmly in the driver's seat in its relationship with advertisers.
Facebook announced on Wednesday it was removing Partner Categories, an advertising option that allowed companies to use third-party data to find customers. One company that provides those information services, Axciom, said its revenue could drop as much as $25 million next year, causing the stock to tumble more than 30 percent.
"It feels like a knee-jerk reaction and Hail Mary to stop the bleeding of #deletefacebook — although TBD on if that's actually making an impact — but more importantly to show Wall Street that they can protect consumer data," said Matt Borchard, group media director for advertising agency Noble People.