Facebook Moves To Become The World's Most Powerful Data Broker

Apr 30 2014, 7:11pm CDT | by

One of the most important revelations at Facebook’s developers conference on Wednesday was Anonymous Logins, a very clever use of semantics by Mark Zuckerberg because it’s not technically “anonymous” at all.

With it, a user’s Facebook data will remain inside Zuck’s behemoth, which with more than 1 billion active mobile users and counting means Anonymous Logins could actually help the wold’s largest social network become the world’s most powerful data broker for advertisers and app developers over the next few years.

Anonymous Logins will let users like you and me hold back from sharing any of our personal Facebook information with the developer or crucially, the lucrative ad networks associated with that app. This extension of Facebook Connect shuts off the spigots of data to anyone outside of Facebook, allowing the social network to retain that data for its nascent, mobile-ad play, known as Audience Network.

Mobile ad networks and even a few developers themselves will hate this feature, because as it encourages users to trust Facebook that little bit more, it’ll also cut off the pipes to the valuable data these third parties were privy to.

Anonymous Logins and Audience Network together make up Facebook’s new big play to advertisers. The pitch is similar to what traditional mobile ad giants like Flurry and InMobi already do on a grand scale, profiling app users to help advertisers better target them. Such networks don’t necessarily need a users’s name to do that effectively, they just need a dossier of their in-app behavior. For example I can be anonymous in name to Flurry, but the ad giant can still build a Flurry ID for my iPhone which gets edited and re-categorized every couple of weeks, and which is still valuable to advertisers.

Where Facebook wins is in amassing a treasure trove of this kind of personal and behavioral data that it can offer exclusively to advertisers. Ad networks like Flurry will still be able to gather data from apps who write their analytics tools into their code, but they are suddenly faced with a competitor which not only has a greater personal insights into an app’s users, but may even have authenticating details like their name and social graph.

As my colleague Kashmir Hill points out, Anonymous Logins “will make people even more comfortable using Facebook as their universal sign-in across the Web and app ecosystem.” Even if that means people aren’t visiting Facebook.com all that often, “they’re [still using Facebook] constantly to interact with other services.”

Facebook is cleverly turning the whole idea of a platform on its head. The traditional way to think of a platform is as a gateway to content and services, like Apple and Google’s mobile operating systems. The lines to these “ecosystems” as clearly drawn and deliberated on by consumers when they buy their next smartphone.

Facebook by contrast is creating a platform far more quietly and out of the view of consumers, by giving back-end tools to app developers like analytics, identifiers and push notifications, along with novel features like inter-app linking — all announced at F8 today.

These incentives, including a new app-growing program called FbStart, ultimately connect the apps we use every day to the giant mesh Facebook is creating behind-the-scenes.

Facebook’s demonstration of AppLinks – the result of its acquisition of Parse a year ago — was particularly striking, showing how users could move from one app to the other without having to close and open them. The resulting experience is similar to navigating between Web pages on a browser, except in this case and unbeknownst to the consumer, they are staying within the Facebook universe the entire time.

By getting out of the way and offering backend tools to developers and Anonymous Logins to consumers, Facebook hopes to encourage a greater divulgence of personal data which it can use as leverage with advertisers who are desperate to better-target their ads.

Of course, it’ll be up to advertisers to determine if the new network Facebook is creating in the background will spell a good return on investment. Facebook still has to roll out Anonymous Logins to more developers and consumers.

But advertisers are already excited about the new insights that Facebook is promising, and some expect they could be better than what’s been offered by Google so far.

“This enlarges the inputs to Facebook’s data,” says Mark DiMassimo, CEO of the ad agency DiMassimo Goldstein, who says he’s “optimistic” about Facebook’s forthcoming services for advertisers. “Google knows what folks have searched. Facebook knows who you are.”

 
 

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