Recently Facebook announced that it will stop using data from third-party data aggregators to supplement its own data that it uses for ad targeting. What does this mean for car dealers?
Until this announcement, Facebook collected data from three sources which it used to accurately target its users with ads. These sources were:
- Facebook’s own data, which it collects from user activity and profiles. For example, Facebook can track which users visit or “Like” certain auto manufacturers’ pages. So, if a Facebook user visits a competing dealerships’ page more than once, you may want to target them with an ad to raise awareness for your dealership brand.
- Your dealership’s data, such as customer emails in your database and loyalty programs. For example, you have a list of all your customers coming off-lease in the next three to six months. Facebook can match customers on this list with its users, allowing you to target them with ads promoting lease renewal options and specials.
- Data from third-party services. For example, Facebook had access to vehicle registration data so it could identify all owners of Toyota Scions. This was helpful to dealers who might want to target all Toyota Scion owners in a defined radius so they could serve up ads and special offers for service and repairs.
So, what happens now that access to the third-party data has been eliminated?
First, initial reports suggest Facebook third-party audiences won’t be removed until September 30th. This gives dealers time to refine their strategies (and time to enjoy results from targeted summer service campaigns).
The good news is that you can still use the data collected from both Facebook and your own database to build new audiences and increase engagement with the best audience that you have—your own customers. Collectively these are referred to as first-party audiences, because your data and Facebook’s first-party data is used to target them.
First Party Audiences on Facebook
This is your most captive audience and one worth paying special attention to. If you effectively take advantage of its value, you won’t bypass countless opportunities to connect with, retain and even win back customers. There’s a reason that more than 65 percent of marketers believe that first-party data provides the best path to understanding customers. This data is a gold mine, and that advantage can not only make an impact to the success of your marketing efforts, but to your bottom line.
The data to target these audiences is collected from actual interactions that customers have with your dealership across a vast array of touchpoints, both historical and in real time. This data can also be used to predict consumer behavior with a high degree of accuracy; for example, as customer interaction wanes, the likeliness of defection increases. Campaigns targeting these customers based on specific behaviors can help increase customer retention rates.
Not only that, but you own this data, so it doesn’t cost you anything. This makes advertising more cost-effective than advertising with third-party data. Finally, and most importantly, due to privacy debates currently taking place and the questionable future of third-party data, your first-party data is safe.
This data can be used to target several categories within first-party audiences, including:
A custom audience created from a customer list is an audience made up of your existing customers. You can target ads to this audience via Facebook, Instagram and Facebook’s Audience Network, a display ad network that allows you to extend reach by displaying mobile ads through a number of apps and websites.
Communicating with this group, which could include people who are in your database or who have visited your website, helps you stay top of mind as well as build trust and customer loyalty.
By focusing on this powerful segment, you are able to build audiences based on people similar to your customers. This is particularly helpful when your strategy focuses on building brand awareness and introducing new prospects to your business and capabilities. If your goal is a conquest strategy identifying target consumers across Facebook and Instagram, this is the way to go.
Unique insights are gained from other marketing efforts across Facebook, greatly increasing the chance of your message resonating with the right people who are most likely to take action.
No one knows your customer better than you, but by segmenting your audiences based on distinguishing factors, you’ll discover those most likely to be responsive to your messaging.
Core audiences are created using the following data types:
- Demographics – age, gender, relationship status, education, workplace, job titles and more
- Location – target key local areas or set a radius around your store
- Interests – drill down into hobbies, preferences or favorite activities
- Behaviors – purchase behaviors, device usage, etc.
The ability to identify core audiences allows you to further refine your custom and lookalike audiences, as well as a strategy to target them. This greatly increases your ad campaign engagement and results.
So, be wary of marketers that downplay the importance of Facebook. The good news is, there are still ample opportunities to use Facebook to be heard by your most important audiences and drive key, responsive customers to your door. Best of all, Facebook provides you with detailed metrics for all of your ad campaigns, so you can measure ROI and determine how well it’s working for you.
Author: Scot Eisenfelder
Scot Eisenfelder is a 25+ automotive market veteran who has driven innovation across multiple auto sectors. Previously, Scot was Senior Vice President Strategy at AutoNation, responsible for major change initiatives in eCommerce, pricing, IT and creating a blueprint for auto retail transformation and before that served as acting CMO, focused on realigning marketing spending. Before that, Scot led JM Family’s dealer software business and was Senior Vice President Product Management, Strategy and Marketing at Reynolds and Reynolds, leading both companies through value creating sales. Scot is a Board member of Quorum, a public dealer software company. He has an MBA from Wharton School, graduating with distinction and is a Palmer Scholar. He attended Mannheim University in Germany as a Fulbright Scholar and graduated summa cum laude in Economics from Princeton.