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Facebook announced an update to Custom Audiences that will allow advertisers to measure offline sales. This update further stresses the social network’s goal to measure the effectiveness of ads throughout the conversion process rather than focusing just on clicks.

The ability to measure offline sales itself isn’t new; companies working directly with a Facebook measurement partner have had access to it for quite some time. Now the functionality is being extended to a wider range of businesses, all of which will be able to measure how well Facebook Ads convert offline for the first time.

Here’s how it works: You upload hashed data, including emails, phone numbers and addresses, as well as encrypted transaction information. From there, Facebook will match your hashed data to hashed data from its database. The social network will then provide a report that compares — on an aggregate basis — the purchase behavior of customers who saw an ad on Facebook with those that didn’t.

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Although these reports provide overall information about sales lift, they don’t offer information such as purchasing profiles or data on individual customers. Facebook noted that the tool was built with privacy in mind, so retailers don’t have to provide personal information people haven’t shared with the social network.

According to Facebook, thousands of advertisers, including more than half of the AdAge 100, already use Custom Audiences in their campaigns. Between Q2 and Q3 2013, there’s been an almost 75 percent increase in the number of marketers using the tool.

With greater access to Custom Audiences, more retailers can now measure sales lift and analyze their campaigns directly through Facebook — without having to rely on a third-party partner. As a result, these businesses will be able to better manage their budget, allocating funds to where they’re seeing the most success.

If you’re interested in measuring offline sales driven through Custom Audiences, and are already working with a Facebook client partner or account manager, you can contact your representative to learn more.

[Via: Inside Facebook, Image credit: Wonderlane]