Facebook is Monitoring Users’ Shopping Habits in Brick-and-Mortar Stores
If you have shopped at Macy’s or Dick's Sporting Goods stores recently, you may have noticed an increased number of their ads in your Facebook feed. This is because the social media giant has allied with these two retailers to drive profits by sharing consumer data with each other.
Retailers send Facebook information about what their customers are buying online and at brick-and-mortar stores. Facebook uses that information to target customers with ads about the products.
It’s not just Macy’s and Dick’s. Businesses from many industries send Facebook customer data, including email addresses, names, phone numbers, and records of in-store purchases. The data, shared in secure hashed form, is used to match purchases to individual Facebook users - who then see ads from those companies in their feed.
In August of this year, Facebook introduced the Off-Facebook Activity tool, which gives users a summary of the apps and websites that have shared their user data with the social media company. It also lets you disable this sort of data-sharing.
"The main way that Facebook makes money is by selling ads, and the reason that it's really able to dominate the online ad industry is because it controls so much personal information and data about its users," says Business Insider reporter Aaron Holmes.
According to third quarter 2019 results, Facebook earned $17.6 billion in July, August and September. As much as $17.3 billion of that money came from advertising.
Facebook’s wealth of demographic information on billions of users makes advertisers flock to it like moths to a flame. No other social network holds as much data on users. No other allows such hyper-targeted advertising.
Retailers who have shared customer data with the social media giant are satisfied with the results.
"We are encouraged by the positive results we saw in-store and are excited to continue testing Facebook's offline suite to fuel our growth," a Macy’s spokesperson told Business Insider.
"With store visits custom audiences, we re-engaged customers who had visited one of our stores with a targeted Facebook ad," a Dick's Sporting Goods representative said in a statement. "And, using lookalike audiences, created from people similar to those who visited our store, opened up a broader audience of new customers for us to reach, driving incremental foot traffic and sales.”
Ivana is a staff writer at SmallBizGenius. Her interests during office hours include writing about small businesses, start-ups, and retail. When the weekend comes, you can find her hiking in nature, hanging off of a cliff or dancing salsa.
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