Facebook Inc (FB)’s Huge Database on Its Users Spooks Its Advertisers

Until recently, websites had no qualms about sharing user information with Facebook Inc (NASDAQ:FB), which was user by the latter to post targeted ads and everyone was happy. But the sheer volume of data collected this way has sowed the seeds of doubt in the minds of advertisers.

Tracking user data by noting IP addresses of the computer in which the user is logged in is nothing new to websites. What makes the data gathered by Facebook different is the fact that it could be related to a real person.

Advertisers not ready to lose the traffic from Facebook Inc (NASDAQ:FB)

Facebook Inc (NASDAQ:FB) and the websites which use it as an advertising medium have a bittersweet relationship. On the one hand, advertisers are happy that their content is being viewed by over 1.3 billion users of the social networking website. But on the other, they are distrustful of Facebook’s huge user activity database.

Several website owners have reached an impasse where do not want to share their data with Facebook but are not quite ready to lose the huge volume of users liking and sharing their content on Facebook either.

Competitors might gain from data collected from their websites

Advertisers are also worried that Facebook Inc (NASDAQ:FB) might be using data gathered from their websites to help competitors, who also advertise their wares through the same platform. Still, advertisers prefer digital advertising to advertising through traditional mediums such as newspapers or magazines as the former could be used to target potential customer base and, as a result, works out to be the cheaper option. Facebook, however, is playing it cool as it does not rely on any one specific website to build its user profiles.

Advertisers have the option to not share their user data with Facebook but, as a consequence, data collected from other websites will not be available for targeting their ads.