 The Newsdesk on SiliconANGLE TV for Tuesday, October 2nd, 2012. I'm Kristen Folletti. Facebook has partnered with data mining firm Datalogix and is preparing to reveal data to quiet its critics and show that clicks only tell half the story of advertising. Does this mean Facebook's IPO has been suffering because of a botched advertising model? We're now joined by SiliconANGLE Newsdesk editor Kristen Nicole with breaking analysis on Facebook's proposed advertising model. Welcome, Kristen. Good morning. So Facebook has conducted a new study through a partnership with Datalogix, and the findings reveal that fewer than 1% of in-store sales tied to brand advertising campaigns on Facebook come from people who clicked on an ad. So why aren't clicks translating into in-store purchases? Well, Facebook certainly has some issues with their advertising models and are facing a great deal of questions and criticism over the format that they've been using for a little while. And click ads, in general, have been one of those things where it kind of depends on the situation for Facebook's social network. It may not be the best use of their space and their layout. So with this new information that they're coming out, what they're really looking to address some of the issues that have been raised, especially since they've gone public and lost some major advertising deals like the one with GM. Tell us about what Datalogix is helping Facebook uncover. Well, some of the information that they're doing is really tied to the physical in-store retail purchasing behavior that consumers are doing and looking for those relationships between the online world and the offline world and how they kind of affect each other. Datalogix, Datalogix goes in and takes information from loyalty cards and brand recognition programs that kind of track consumer behavior within those physical retail purchases. And seeing how that relates back to advertising on Facebook's network will be very important because Facebook's branding, at least their advertising platform, is so heavily tied to those big brands. We spoke last week about Facebook's new gifting service and their dive into e-commerce. Can you tell us more about the variety of new advertising campaigns Facebook has attempted to roll out over the past several months? Several months, several years from Facebook beacon all the way up until the current initiatives. Facebook is constantly evolving and looking for the optimal ways to reach that balance between leveraging consumer data that has been unveiled on their social network and tying that back to the advertising sector. So, however, they can kind of get these two to work a little bit better together and provide value to the brands as well as the consumers. They'll have an easier time moving forward and getting these two to kind of meet in the middle without necessarily destroying the trust of their users and also being a benefit to the brands. Now, how can this help Facebook progress into mobile? That's a very good question and it's something that is going to be increasingly important for Facebook as they look to extend their platform into the mobile realm and advertising dollars in the mobile space just continue to increase. And with data logics in particular, it's also an area that they've had a focus on, especially as mobile is the technology that's considered a way to bridge that physical and online experience. Why aren't clicks relevant to brand marketers? Well, there could be a few different reasons why they may not be relevant. They may not translate directly into purchases in physical stores. Sometimes they translate into purchases online. And with the growing number of ways to interact with brands online and offline, there's going to be an increasing number of metrics that a brand can utilize to determine how to best reach out to those users. And especially in this emerging era of curation, user-generated curation, slides like Pinterest and others that have more bookmarking mechanisms and consumer intent built into that platform, are showing that there's more than just click-through rates to advertising. We know advertisers have relied on clicks largely because of Google's easy-to-measure advertising model that lets marketers reach consumers at the moment they're searching for a particular product. But Facebook argues that for brand advertisers, a more fine-tuned approach is necessary. So can you explain what Facebook feels is a more effective technique? I think it's an important distinction. And I think it's good for Facebook to continue down this path because the more information and the more metrics they're able to provide to brands, the more analysis that can be done. And the more effective their advertising platform can become. So one of the complaints that a lot of brands have had with Facebook's advertising over the years is that there's not enough of that information available to them to make the right decisions and the right calls as to how they should go about advertising on Facebook's network. So why is this information more useful in terms of feedback than total clicks? It just offers a bigger picture. It's more comprehensive. The more information you have at hand, the better of an educated guess you can make as to how you can best reach those consumers. So it's going to be very important for a lot of companies, even beyond Facebook, but particularly the brands that want to continue to market through this platform that they have as much information available as possible. Is this something that you feel companies are going to want to get on board with? Absolutely. I think any company that's looking to advertise on Facebook as many of those metrics as possible. And of course, what Facebook is going to have to do is manage their responsibility as to making sure that they don't violate user privacy in doing so. So this is going to be a question of user privacy and security. And Facebook being the massive network that it is is going to really be an industry leader in setting the bars for how user privacy should be handled when it comes to brand marketing. So on the flip side, if companies aren't on board, do you feel it's because of a privacy issue? It could be. It really depends on that company's own ethics and how they determine that they want to go about leveraging consumer data for marketing purposes. So it's one of those things where there isn't a lot of regulation in play quite yet. And the industry is self-regulating at this point. And we're really going to be looking to leaders like Facebook to set the tone or at least provide an example of how to or how not to do things. Now if this ad model does prove successful, could it be something that could potentially boost Facebook's suffering IPO at this point? It very well could be. Facebook needs to really determine how it's going to roll out its advertising structure and its platform in the future. And like we discussed earlier, mobile is going to be an important part of that as well. So whatever they can do to better achieve more revenue through this advertising channel, the better off they'll be with investors. In its plan, Facebook talks about offering advertisers an ideal number of ad impressions for a particular campaign. So what goes into calculating that ideal number? There could be a lot of things that go into calculating that ideal number from the different types of Facebook activity. And of course the social graph only continues to grow and the more metrics and data input points that can be integrated into this type of analysis, the better clear picture Facebook can get and extend that information on to the brands. You mentioned earlier that Facebook's partnership with Datalogics has raised some complaints from privacy advocates. Is there another situation where Facebook can say since users don't pay to use their site, information is fair game? Or could this be something that could lead to another court battle? I don't know if it'll go so far as a court battle. At this point, I know there are some privacy groups that are probing the FCC to look into the partnership between Datalogics and Facebook to see if this is really a case where user privacy is being respected. And when it comes to Facebook's messaging around this, education for their end users has always been a hurdle for them finding the best way to extend their services as well as the reasons behind the decisions that they make in terms of using that information that consumer activity for monetization purposes continues to be a challenge for them. Well, Kristen, we appreciate you having you on. Thanks so much for joining us today. Thanks, take care. And stay tuned for more news of the day and the latest breaking analysis here on SiliconANGLE TV.