Facebook Overhauls Advertising – Removes Zip Code, Gender, Age Targeting for Housing, Employment, and Credit Ads
Facebook announced it will overhaul its targeted advertising for certain verticals – a result of historic settlement agreements with leading civil rights organizations claiming Facebook’s targeting capabilities allowed for discriminatory advertising practices. By the end of the year, the social media giant will begin withholding demographic information (think gender, age, and zip codes), parameters that are often used by advertisers to market housing, credit, and job opportunities.
Organizations like the National Fair Housing Alliance (NFHA), the American Civil Liberties Union (ACLU), the Communication Workers of America (CWA), and other private parties filed litigation against Facebook stating the platform’s advertising was discriminatory through its demographic targeting, which allows advertisers to target or intentionally exclude Facebook users by gender, age, and zip code, factors that can often indicate race. According to the Washington Post, “civil rights advocates have warned for years that Facebook’s ads violated anti-discrimination laws because advertisers were able to use the data to exclude African Americans, women, seniors, people with disabilities and others.”
Unsurprisingly, this step is anticipated to reverberate through the tech industry among companies that offer similar demographic targeting tools.
What is Specifically Changing for Facebook Targeting
The platform announced the following changes as part of its settlement with the NFHA, ACLU, CWA, and other groups:
- Anyone who wants to run housing, employment, or credit ads will no longer be allowed to target or exclude by age, gender, or zip code.
- Advertisers offering housing, employment, and credit opportunities will have a much smaller set of targeting categories to use in their campaigns overall. Multicultural affinity targeting will continue to be unavailable for these ads. Additionally, any detailed targeting option describing or appearing to relate to protected classes will also be unavailable.
- Facebook is building a tool so users can search for and view all current housing ads in the U.S. that have been targeted to different places across the country, regardless of whether the ads are shown to you.
What The Updated Targeting Means For Marketers
Demographic Targeting (and Excluding) Based on Assumptions of Race, Gender, or Income Has Never Been Considered Best Practice in the Selected Industries.
In the housing, employment, and credit industries, using demographics to target or exclude certain Facebook user groups by “race, gender, income” has always been heavily frowned upon by Facebook. In a recent post from Sheryl Sandberg, Facebook’s Chief Operating Officer stated, “our policies already prohibit advertisers from using our tools to discriminate. We’ve removed thousands of categories from targeting related to protected classes such as race, ethnicity, sexual orientation, and religion. But we can do better.”
Use Behavior Indicators to Reach the Right Facebook Audiences.
Not all Facebook users self-report their full demographic profile to the platform, so in certain cases, demographic targeting can be inferred by Facebook. Also important to note: Facebook gets additional data from third-party sources and does not rely solely on its own first-party data. And this means there can always be a margin for error to an approach that is exclusively focused on demographics – targeting this way can limit scale and ability to reach a qualified audience.
With less ability to target based on demographics, behavior indicators will become even more important for all advertising, which is true for all verticals (not just for those impacted by last week’s update). Matching a behavior to a business goal’s intent is likely more accurate than matching a demographic to that business goal’s intent (i.e. if you want to buy a house, you buy a house regardless of your race, age, etc.). Overall, this shift will make audience and consumer research even more important to the strategy and media planning process for advertisers.
Will This Affect Other Industries?
Right now, no. If Facebook starts to roll out similar changes to other verticals – where these targeting parameters are more commonly used – the platform can expect harsh reactions from advertisers who rely on demographic data in campaigns.
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