Rob Goldman, vice president of Ads at Facebook, tried to explain why Facebook is collecting users's data and what how the social network is using it.

Digital advertising has radically changed since the early days of banner ads on the top of a website.

In a blog post, Goldman said that advertising lets the company keep Facebook free and that any data collected related to users' online and offline habits is impersonal and is not sold.

Advertisers can reach users with relevant ads by using information related to their age, gender, hometown, friends, clicks, likes posts e.t.c. However, Facebook says that advertisers don't know who you are.
They get reports about the kinds of people seeing their ads and how their ads are performing, but this information does not personally identifies you.

In other cases, advertisers bring Facebook the customer information so they can reach those people on Facebook. These advertisers might have your email address from a purchase you made, or from some other data source. Facebook finds the related accounts that match that data, but says it does not tell the advertiser who matched.

Some of the websites and apps you visit may use Facebook tools to make their content and ads more relevant and better understand the results of their ad campaigns. For example, if an online retailer is using Facebook Pixel, they can ask Facebook to show ads to people who looked at a certain style of shoe or put a pair of shoes into their shopping cart.

"Our product is social media - the ability to connect with the people that matter to you, wherever they are in the world. It's the same with a free search engine, website or newspaper. The core product is reading the news or finding information - and the ads exist to fund that experience," Goldman said.

When an advertiser runs a campaign on Facebook, Facebook shares reports about the performance of their ad campaign. For example, Facebook can tell an advertiser that more men than women responded to their ad, and that most people clicked on the ad from their phone.

Goldman added that Facebook needs all this data in order to give you "a better service." "For example, we can show you photos from your closest friends at the top of your News Feed, or show you articles about issues that matter most to you, or suggest groups that you might want to join," Goldman said.

He also admitted that you can't opt out of ads altogether because ads "are what keep Facebook free." However, you have different options to control how your data can and can't be used to show you ads, through - not so straightforward - ad preferences.