On July 1, Facebook automatically opted advertisers into its new Limited Data Use setting for California Consumer Privacy Act (CCPA) compliance. When Limited Data Use (LDU) is enabled, Facebook restricts the way data from users detected to be from California can be stored and processed. The feature is already having a dramatic impact on advertisers.
CCPA gives California residents the right to know how their data is being used, what categories of data are being collected and sold (e.g., name, IP address) and the ability to opt out from allowing companies to do so. It doesn’t just apply to business based in California. Like the EU’s GDPR, CCPA applies to any affected businesses that receive personal information from California residents.
If you’re not familiar with Facebook’s Limited Data Use, yet, see contributor Simon Poulton’s thorough overview about how Facebook’s handling of California user data might affect your business. And read this from our sister site MarTech Today if you’re unsure if CCPA applies to your business.
As a baseline, one or more of the following conditions must apply for CCPA to apply to a company:
- Has annual gross revenues in excess of $25 million;
- Possesses the personal information of 50,000 or more consumers, households, or devices; or
- Earns more than half of its annual revenue from selling consumers’ personal information.
Potential action required
In the Events Manager in Facebook Ads Manager, there is an option to extend the transition period and keep Limited Data Use on by default until October 20, 2020.
If you need more time to implement Limited Data Use for your Facebook events, you’ll want to check that option.
Limited Data Use can be implemented for FB Pixel, Conversions API, App Events API, and Offline Conversions. See the developer documentation for implementing LDU.
If you take no action, Facebook will no longer flag users detected to be residing in California. Per Facebook, take no action or end the transition period now if:
(a) Your business isn’t subject to the applicable law.
(b) You’re complying with the applicable law in another way (for example, filtering events before sending them to Facebook).
(c) You’ve completed implementation of Limited Data Use for this data source.
Advertisers feeling the effects of Limited Data Use
Many advertisers are acutely feeling the targeting and attribution limitations as a result of Limited Data Use as it puts many of California’s nearly 40 million people out of reach.
“Facebook’s limited data-use policy has blown up performance in California for all brands.” said Joe Yakuel, CEO of ad agency WITHIN, which manages e-commerce advertising budgets for Nike, Hugo Boss and Shake Shack.
Yakuel said in the first six days of July, the CPA (cost per acquisition) in California was 500% higher than other states and conversion rates dropped by 84%. As a percentage of overall U.S. ad spend, California fell from 10% to 5.5%.