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    Red Tape Chronicles: Facebook to team up with real-world data brokers to pick ads for you

    Red Tape Chronicles reports on a new way that online and offline data about individuals will be combined by marketers to create online targeted behavioral advertising — this time, social-networking site Facebook will reportedly be involved. The story notes that people can opt out of one data-marketing company’s online digital advertising by visiting Datalogix’s privacy page and clicking under the section labeled “Choice.” Red Tape reports:

    The offline and online data collection worlds are about to collide as never before. Facebook will soon announce partnerships with Axciom, Epsilon and Datalogix, three real-world data marketing giants with access to billions of pieces of information about Americans’ shopping habits, according to a person familiar with the deal.

    Facebook will not share its users’ data with these firms, said the source, speaking on condition of anonymity. Instead, it will allow advertising clients to enlist the help of offline data to deliver targeted Facebook advertising, the source said.  A supermarket loyalty card user, for example, might see Facebook ads that reflect their grocery-buying habits.

    Facebook will use added security features to make sure data doesn’t flow between it and the database firms, and that matches will be made using a technique that makes individual consumers blind to the companies involved, the source said. […]

    Still, the marriage of real-world and virtual databases has some privacy advocates nervous.

    “There needs to be limits on Facebook’s growing use of outside data broker information so its users can be targeted by marketers,” said Jeff Chester of the Center for Digital Democracy.  “Companies like Acxiom, etc., contain vast stores of details about us, including online and offline information.” […]

    Epsilon did not immediately respond to requests for information about the deal, which was first reported in AdAge. A spokeswoman for Facebook said she would not comment on the report.

    Data brokers Acxiom, Epsilon and Datalogix already use their vast records — which include e-mail lists, grocery store shopping habits, and much more — to send highly targeted junk mail and other kinds of advertisements to consumers. Increasingly, these firms have tried to sell their market intelligence online. […]

    Here’s how the data sharing will work, according to the source: Epsilon, Datalogix and Axciom will upload lists of customers to Facebook, tagged through email addresses or phone numbers. Facebook will then find matches among its users, and create what it calls “custom audiences.” These can be narrowly focused –18- to 24-year-olds in California who drink cola, for example.  Then, these audiences can be targeted with precise softdrink ads.

    Facebook will not know the identity of these consumers, however, because the data it receives from its partners will be scrambled, or “hashed,” preserving their privacy.  No data will change hands, said the source.

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