Facebook gets the majority of their revenue on advertising but even so, the social networking giant’s advertising strategy is being questioned.

Facebook is getting ready to unveil a new advertising strategy that removes the focus on “clicks”.  For some time now, clicks have been the basis for determining how popular a brand is on Facebook.  But Facebook argues that brands should let go of the click mentality, as it’s not the only metric for measuring traction.

Through a controversial partnership with Datalogix, a data mining firm that tracks real-world retail sales, Facebook hopes to educate brands that advertising on Facebook, even if consumers do not click on it, translates to real-world success.  The partnership aims to give brand marketers pertinent data regarding the actual in-store sales that their ad campaigns on Facebook have generated, which, in Facebook’s opinion is more useful than the total clicks.  By compiling consumer purchasing information from retail stores and matching it with Facebook’s ad impressions data,, Datalogix can track the relationship between ads on Facebook and real-world spending.

What this means, in my understanding, is that Facebook will track what ads consumers see on the site and better associate that data with in-store activity and purchases.  For example, Samsung placed an ad on Facebook regarding the arrival of the sapphire black Galaxy SIII in a certain store.  When a consumer buys that sapphire black Galaxy SIII, at the counter, he will be asked where he heard about the new arrival, if from a friend, a newspaper ad or from an ad on Facebook.  It’s like Facebook stalking you in real life.  Or Datalogix can just access consumers’ credit card activity and cross-reference it to ads on Facebook and see if people who saw the ad were the ones who purchased that particular item.  Which is even more disturbing to many privacy groups already wary of Facebook’s advertising methods.

And this is why Facebook’s ad strategy is already taking a hit as two privacy advocates, the Center for Digital Democracy (CDD) and the Electronic Privacy Information Center (EPIC), wrote to the U.S. Federal Trade Commission stating that the social networking giant may be in violation of privacy settlement by not obtaining users’ consent  to share their personal information with Datalogix but the social networking giant stated that no personal information will be given.  The only information FB will give to Datalogix is with regards to people exposed to certain marketing messages.   They also added that Facebook is also not receiving any personally identifiable information from Datalogix.

It will be hard for Facebook to convince brands that clicks aren’t really important because they’ve come to know how easy it is to measure popularity by clicks.  But if what Facebook claims is true, that clicks are indeed not the best way to measure brand awareness, then good for them.  To truly convince brands of a new advertising model, Facebook will have to provide as much data as possible for brands to analyze and reach their own conclusions.  And for consumers, Facebook will have to offer as much transparency as possible, a prerequisite that’s been tough to maintain through consumer education alone.

With sites like Pinterest and Google+ taking a more holistic approach to consumer activity-tracking and analysis, brands are well aware of the broadening range of metrics that demonstrate consumer intent.  In this case, Facebook can use data as its friend, as long as it can reach the right balance between brand and consumer motives.

Here to discuss Facebook’s ad strategy in detail is Senior Editor Kristen Nicole, who appeared on the News Desk program with Kristin Feledy this morning.  See the video below for the full interview.