Facebook-Datalogix Partnership to Track Offline Purchases

Facebook has announced a new partnership with market analytics firm Datalogix, designed to measure how often Facebook's 1 billion users see a product advertised on the social site, then complete the purchase in a real-world retail store. How do they plan to do this? By tracking the purchases of more than 100 million households at 1,200 brick-and-mortar retailers.

Facebook assures privacy watchdogs the user data will be anonymized via encryption and that no personal user information will be shared with Datalogix. However, privacy experts at the Electronic Privacy Information Center (EPIC) and the Center for Digital Democracy (CDD) aren't convinced; they're already fired off a letter asking the FTC to investigate.

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Facebook's Brad Smallwood, head of measurement and insights, responded to their concerns - sort of. He published a post on the Facebook blog Monday, reiterating the benefits of the program as well as Facebook's goals. He said, in part:

Since the early days of digital advertising, online marketing has been focused on optimizing ad campaigns for the click. But while clicks are an effective way to measure campaigns designed to drive traffic and fulfill direct response goals, increasingly, research from firms like Nielsen suggest that clicks aren't the right metric for the broader set of marketing objectives beyond direct response. So how can marketers with goals like driving in-store purchase or branding objectives - those similar to TV - build and measure their campaigns?

"Products like Nielsen Online Campaign Ratings measurement solution can help brands optimize for reach and effective frequency for their digital campaigns, and Datalogix's new tool can measure real return on investment by connecting those brand digital ad exposures to in-store sales. This is something that has never been done before at this scale."

The Electronic Freedom Foundation isn't buying the feel-good benefits for advertisers as justification for the potential loss of consumer privacy. In "A Deep Dive into Facebook and Datalogix: What's Actually Getting Shared and How You Can Opt Out", they explain how loyalty programs are the backbone of Datalogix's advertising metrics program.

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