It took Facebook about six months to start using all that offline consumer data it's made deals for more than just "research" and put all thats rewards cards information to good lucrative use. With its new "ad effectiveness" program Facebook will serve specific ads that reflect your specific offline shopping habits, a set-up that ranges from creepy to uncomfortable. Since announcing its partnership with Datalogix, a company that uses rewards cards data from drugstores to track what people buy in offline retail stores, Facebook has partnered up with two similar firms Epsilon and Acxiom and has now started using all this information to serve more accurate ads, according to The New York Times's Somini Sengupta. Someone who bought Tums at CVS, for example, might start seeing ads for other digestive products on Facebook. Another person who bought a Ford five years ago, might start seeing ads new car ads because that's when people often think about trading in for a new model. Our "IRL" shopping habits have officially made their way to the social network's money-making scheme—a pretty big departure from all this information just being used as anonymized data to see if ads are working.
However: while targeted advertising seems to be the exact opposite of online anonymity, Facebook says your privacy is maintained by "hashing", as Gokul Rajaram, product director for ads at Facebook told The Atlantic Wire. As he explains it, the brands (with the help of Datalogix) provides email addresses in the forms of "hashes"—strings of letters and numbers—for the people it wants to reach: People in the database who haven't bought a car in five years, for example. Facebook then matches those with hashes of people who fit the hashes that the brand wants to meet. This adds a layer of security — no person sifts through email lists — but it has the effect of helping the computers on one side tell the computers on the other side which individuals are the target audience. The social network requires a group of at least 20 people, so even if a marketer tried really hard it couldn't figure out who within a bucket of say 100 people saw the ad. But ultimately, the most important privacy protection seems to be that neither Facebook nor the brand really care who you are. "Marketers think in terns of segments anyway," Rajaram said. And Facebook just wants to sell the most accurate ads.