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For advertisers obsessed with racking up 'Likes' on the world's largest social network, reality can be harsh: not every consumer you're targeting is going seek you out and like you on Facebook.

So what are advertisers to do? Facebook may have the answer.

Last week, Inside Facebook reported that Facebook began testing a new set of options that would allow advertisers to target 'Custom Audiences' on the social network by email, phone number and UID.

As AdWeek's Tim Peterson explained, to accomplish this, Facebook turned to techniques that are familiar to direct marketers:

A brand uploads a file including the email address or phone number a consumer provided when he or she made a purchase in a brick-and-mortar store or online; an app developer can upload the user ID it received when a Facebook user connected his or her account with the app. That file is hashed...Facebook then looks at its own hashed data to see where it matches with the advertiser’s information. Facebook informs the advertiser of the number of matches it found—actually, the number of an advertiser’s current customers it can target with a Facebook ad—and then the advertiser can run the campaign against those users.

According to Facebook, some of the advertisers it has been testing with have seen impressive results. One, a financial services firm, reportedly "ended up doubling its fan base." Another, an app developer, used Facebook's new targeting functionality to let existing users know about an update and saw an ROI that was at least double that of previous campaigns.

That companies would be able to use this type of targeting to good effect is not surprising: if you have an existing relationship with someone, you stand a better chance of getting them to pay attention to your message, particularly if that message is relevant to a product or service that they expressed interest in or purchased from you in the past.

Will the creep factor kill the goose that laid the golden egg?

Facebook generates well over a billion dollars a year selling advertising, but thanks to its exorbitant public valuation, it is under a lot of pressure to prove to investors that it can grow its ad revenue in a meaningful way. As a result, Facebook is increasingly looking to prove to advertisers that its ad offerings can generate an acceptable return.

But at what cost?

Inside Facebook's screenshot of the Custom Audiences setup tab indicates that Facebook hashes the email addresses, phone numbers and UIDs advertisers provide before they are uploaded to Facebook. Although one could argue that the hashing should be done by the advertiser (and not a Facebook process), assuming that Facebook really doesn't have an opportunity to look at personally identifiable information being submitted, the question still remains: how comfortable will Facebook users be once they realize that companies they've interacted with -- including through other online and offline channels -- are effectively stalking them on the social network?

At the end of the day, Custom Audiences may be the creepiest ad feature Facebook has ever experimented with, and it creates a substantial amount of risk for the world's largest social network. Will the company's willingness to allow advertisers to stalk users be the straw that breaks the camel's back, encouraging users to, at a minimum, share a lot less about themselves? Time will tell.

But for advertisers enticed by Facebook's increasingly aggressive ad capabilities, it's worth remembering: when it comes to how you employ the personal information your customers entrust you with, your customer relationships could be in just as much peril.

Patricio Robles

Published 4 September, 2012 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

2364 more posts from this author

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Jason

This has to be seen as a quick win for Facebook. Think about it, all it is really doing is (kinda) inviting people to like your page from an email address you already have, so unless you plan to track all the new likes you get to your page (which you can't) brands are likely to be talking to the same consumers in 2 different (at least) spaces, with no opportunity for segmentation.

Soon like numbers will become meaningless to brands (and when they say it, they'll really mean it) - unless its really creating an action from the engagement of clicking like, then its pointless.

That engagement became much much harder when Facebook changed to the ticker and tried to make up for it with sponsored stories. These were never stories, or advocates just 'people you have things in common with' and you'd kind of expect that - they are YOUR FRIENDS.

anyhoo....just one of many new tricks FB has to try - has anyone told them about adding some value to advertising rather than just creating new advertising methods?

almost 4 years ago

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Frank Smith

As much as this new function may help Facebook monetize the site further. Customers and users of Facebook may not appreciate that Facebook is almost abandoning the earlier principles of the site being about the social networking experience rather than focusing on profiting from advertising.

almost 4 years ago

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Andrew Allsop

"At the end of the day, Custom Audiences may be the creepiest ad feature Facebook has ever experimented with"

How is this any different to email marketing?

almost 4 years ago

Patricio Robles

Patricio Robles, Tech Reporter at Econsultancy

Andrew,

If the average consumer gives you her email address, she probably expects that you'll email her. I don't think she expects you to use it to track her down on third party sites.

almost 4 years ago

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Andrew Allsop

An email address is an identifier, it's just as tied into your Facebook profile as it is to your email client. Besides, does anyone actually care about privacy? If they really did...they wouldn't be on Facebook, or the internet for that matter.

almost 4 years ago

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Anna Corp, Online Marketing Manager at Debenhams

This may be creepy but the question still stands: are consumers interested in any ads, no matter how targeted, on Facebook?

almost 4 years ago

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Akquikon Stephan Jäckel

I guess we all can agree that stalking as we know it in this world is a profoundly anti-social form of behavior by a person with most likely one or more mental dysfunctions.

So now that we are entering the Social Business Age - where companies, brands, products and services will mor ethan ever be judged upon by the social interaction a company shows with clinets, prospects and the world in general, by its corporate conduct and the values beyond economics that it provides for society - businesses are actually starting with anti-social behavior?

Well not that many customers might be suprised to see this happen given the socially inadequate actions and behaviors by enterprises in the past. But to go to these lengths and these extremes right when it becomes more and more a must to move into the rother direction is probably a sign of how much companies have lost touch with the present and are living in their own world of revenue planning, bonus-planning, success-planning, and all other forms of central planning by controlling that may be nice to have but is useless when the truths of the market get neglected!

almost 4 years ago

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Thomas Barrell, eMarketing Manager at Santander UK plc

How is this creepy or stalking? Why do you have to take that angle and not reflect on the positive.

over 3 years ago

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