Monday, September 24, 2012

Facebook Inc (NASDAQ:FB) Is Monitoring Consumer Behavior Via Data Mining Firm

Facebook Inc(NASDAQ:FB) is now tracking consumer behavior with the help of a data mining firm to portray to marketers that consumers are purchasing products advertised on the social network. Data from 70 million U.S. households has been bought from Datalogix, which accumulates the information from loyalty cards and programs from more than 1,000 retailers. A Facebook account is created by matching emails and data from those cards and programs with emails and information needed for an account. This information can be used to track if a consumer has bought an item after seeing its ad on the site.

45 campaigns have been monitored, according to Brad Smallwood, Facebook’s head of measurement and insights. A dollar spent on Facebook has given sales of $3 as per the results of 70% of those campaigns. Due to enhanced features offered to marketers, brands need not wait for Facebook users to “Like” the brands, in order to advertise a particular product.

Facebook has recently entered into a $9.5 million settlement with the Federal Trade Commission regarding privacy issues. Users need to be intimated if their information is being used and their approval is required before any details can actually be used. This tracking method has once again raised questions about the privacy of users. However, Facebook has reassured that individual user data is not compromised and the privacy of users will not be hampered as this is just a method for tracking consumer behavior in order to know more about their preferences.

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