Don’t be surprised when you’ve finished shopping and saw ads right on Facebook: Everything makes sense

If you've been shopping at a store recently, you might have noticed ads related to the store or recently purchased item on Facebook. It does not happen by accident but has its reasons. Through collaboration with retailers, Facebook learn what users buy, both online and offline. This data is used to display targeted ads based on what they tend to spend money on.

According to a Facebook spokesperson, the company started using this type of information "outside of Facebook" in August 2019 and gradually expanded globally. The spokesperson emphasized that the data on the items that the user was shopping had been "hashed" before matching their account, meaning that Facebook did not keep a history of past purchases. Instead, Facebook only knows your account "matches" with a certain retailer.

Advertising contributes huge revenue to Facebook. Of the $ 17.6 billion the company earned in the third quarter of 2019, $ 17.3 billion came from advertising. What makes Facebook appealing to advertisers is detailed demographic information, which allows ads to hit the target.

Facebook explains the process of understanding users' offline shopping as follows:

The process starts when you buy something, whether online or out of the store. The retailer may save information about you from this purchase.

If the retailer cooperates with Facebook, they will send Facebook their email, phone number, name, zip code, city, state, country, birthday, gender, age.

Facebook only needs some data from a retailer to create a "custom audience", or a group of users who shop here.

The data is hashed before being uploaded to Facebook and deleted after the user is matched with the retailer. "Hashing" is a common operation, turning text into a code that can only be read by an algorithm.

After clearing the "hash" data, the only thing left is to pair. Facebook uses information from retailers to match user accounts.

From here, retailers can buy ads on Facebook to display directly to "custom audience".

A number of retailers have used activity outside of Facebook to buy ads on social networks, including Macy's and Dick's Sporting Goods. That helps them reach new customers, motivating customers to visit stores and shop.

Users can exit Facebook tracking by going to Settings, selecting Ads and disallow "advertising based on data from partners".