What is a Facebook Ad?
A Facebook ad is placed in the right sidebar on a user’s homepage, as illustrated below, or it can also appeal on profile pages, and fan pages. However, despite the location of the advertisement, the ads are under a heading labelled as ‘Sponsored’.
A screenshot of a Facebook advert on the side of a user’s live feed
Facebook aim to display ads to users which they are relevant to, as this will produce better results for the advertiser, and Facebook. When a business is considering using a Facebook ad, they should consider all the targeting options available to them to maximise the potential of the advert. Thus, this blog aims to discuss how a business can target through advertising on Facebook.
The Benefits of Facebook Advertising
Before the blog goes in to a discussion regarding how to target the relevant audience, one must discuss the benefits of advertising on Facebook. It is evidential that there is an abundance of advantages when using Facebook advertising, however, this blog will identify the three key advantages.
It can be observed that Facebook offers a business the ability to enhance brand image, brand equity and therefore enhancing consumers’ intention to purchase (Dehghani, M & Tumer, M, 2015). Dehgannie and Tumer (2015) also observed that smaller firms can take advantage of Facebook advertising as it can be less expensive in comparison to other marketing channels.
The second advantage of Facebook advertising, is that the businesses has the ability to engage with potential customers (Gummerus et al., 2012). Mangold and Faulds (2009) also support this, stating that social media has the ability to engage a community.
Another key advantage, which one is focusing on in this discussion, is the power of targeting when advertising on Facebook. Davis (2014) outlined that when a business is advertising on Facebook, they have the ability to target in a number of different ways. Kim (2015) illustrated that firms can target through the use of recent purchasing behaviour, life events, and much more which will be discussed throughout.
Partner Categories Targeting
Partner categories are effectively, customer profiles derived from third party data from companies such as Datalogix, Acxiom and Epsilon. Why did Facebook introduce partner categories?
Advertisers on Facebook can focus adverts using the data produced by Facebook, i.e. the location, age, place of work and so on of the users. But potential consumers do not live their lives on Faacebook, i.e., they do not pay for food on Facebook, they do not buy holiday’s on Facebook and so on. Although, the Facebook user’s may post a status informing their friends they have made such purchases, this does not provide hard data where advertisers can delimit groups to advertise to.
Therefore, partner categories was introduced so advertisers could use this type of information to focus the adverts to users who have a particular interest in the area.
How to Use Partner Categories?
Partner categories can be used by using Power Editor, this is a tool used for advertisers who need to create ads and have precise control over the campaigns (Facebook), i.e., using partner categories.
Once the advertiser is on the Power Editor tool they can click on one of the ads and click on the audience tab, this is the tab that the advertiser will find the partner categories in. 
(Grizzell, N, 2014)
Proceeding this, the advertiser has the ability to utilise the partner categories to focus their advertising campaigns. Using an extremely wide array of data as illustrated below.
A screenshot of just a few of the categories to choose from. There are over 500 partner categories (Loomer, J, 2013)
This screenshot and information is from 2013, thus, it is highly likely this data is now out of date, however, it is an illustration of how much data there is for advertisers to use to focus their advertising campaigns.
It can be observed that within the categories there is millions of users, this is because Facebook had 1.35 billion monthly active users as of the third quarter of 2014 according to Statista (2014). Thus, what does this mean for the advertisers, as the whole point of Partner Categories is to focus the advertising campaign to an extremely precise level and only apply it to the relevant users.
It can be observed that when an advertiser is using the Power Editor they can click a number of Partner Categories. Let us illustrate this with an example company, a car sales business in Brighton, specifically selling sports cars, of the brand BMW. The business owner can use the following categories; Sports car owner (x amount of user), make is BMW (y amount of users), vehicle is 5+ years old (z amount of users) and price is between £40k and £80K (w amount of users). If the business owner cross references these categories they will get a group of Facebook users which is applicable to the business, however, the number is still likely to be high. Thus, the advertiser can target further using the core audiences targeting, and applying the location of the users within this cross referenced group of users. Proceeding this process, the car sales company owner will get a group of people with sports cars, of the brand BMW, over 5 years old and who are within a close proximity. Therefore, a target audience which is very relevant to the market which the owner will be targeting, consequently, hopefully with a good advertising strategy, the business owner will gain more sales/leads.
Thus we are able to see the power of Partner Categories targeting, some have argued that it is a better method than Google AdWords (Klaassen, A, 2007), however, this is still a very debatable and new area of targeting.
Conclusion
It is clear that the use of Partner Categories is an extremely powerful tool for advertisers. It is an easy process to follow, and it is a form of targeting which is very developed with an extensive array of data on users. Consequently, I would recommend it to any business which has enough resources to invest to make it worthwhile.
References:
Dehghani, M and Tumer, M. (2015). A research on effectiveness of Facebook advertising on enhancing purchase intention of consumers.Computers in Human Behaviour. 49 (0), 597-600.
Davis, B. (2014). A guide to the new power of Facebook advertising. Available: https://econsultancy.com/blog/64924-a-guide-to-the-new-power-of-facebook-advertising#i.53pyrbflxcux10. Last accessed 17th April 2015.
Kim, L. (2015). 5 Ridiculously Powerful Facebook Ad Targeting Strategies. Available: http://www.wordstream.com/blog/ws/2015/01/28/facebook-ad-targeting. Last accessed 17th April 2015.
GUMMERUS, J., LILJANDER, V., WEMAN, E. and MINNA PIHLSTRöM, 2012. Customer engagement in a Facebook brand community. Management Research Review, 35(9), pp. 857-877.
Gylnn Mangold, W and Faulds, J, D. (2009) Social media: The new hybrid element of the promotion mix. Business horizons. Vol. 52, issue 4. Pages 357-365.
Facebook. (2015). Get Started with Power Editor. Available: https://en-gb.facebook.com/help/162528860609436/. Last accessed 17th April 2015.
Grizzell, N. (2014). Facebook Partner Categories: What you Need to Know. Available: http://www.agorapulse.com/blog/facebook-partner-categories-what-you-need-to-know-2014. Last accessed 17th April 2015.
Loomer, J. (2013). How to Target Facebook Ads Based on Purchase History, Lifestyles and More. Available: http://www.socialmediaexaminer.com/facebook-partner-categories/. Last accessed 21 April 2015.
Statista. (2014). Number of monthly active Facebook users worldwide as of 4th quarter 2014 (in millions). Available: http://www.statista.com/statistics/264810/number-of-monthly-active-facebook-users-worldwide/. Last accessed 21 April 2015.
Klaassen, A 2007, ‘Facebook vs. Google’s AdWords’, Advertising Age, 78, 34, p. 6, Communication & Mass Media Complete, EBSCOhost, viewed 21 April 2015