Facebook will soon let advertisers participate in real-time bidding to show ads on its website, as the social network looks to boost its ad revenue amid mounting pressure from its new shareholders, according to a news report.
A service called Facebook Exchange will let advertisers reach users based on their browsing history elsewhere on the Web. Advertisers can bid on ad slots on the social network.
The ads will be sold by third-party ad brokers that use cookies to track users on the Web.
Before now, Facebook ads used targeted based on interests within Facebook and a users ‘likes’, but were not linked to a users history outside the site.
The new exchange, first reported by Bloomberg should give advertisers a better idea of whether you really intend to buy something or not — and will let them bid to place an ad on a users’ profile. The ads they see will depend on who won that bid.
To fully opt out, users will have to go through the messy process of disabling those third-party cookies.
According to Bloomberg, technology eight demand-side platforms — TellApart, Triggit, Turn, DataXu, MediaMath, AppNexus, TheTradeDesk and AdRoll — are involved in the test.
The program will be more widely available for traditional Facebook ads on the right-hand side of the page within the next few weeks. Facebook Exchange will not apply to Sponsored Stories or mobile ads.
Traditional Facebook advertisers — those using the self-serve tool or the Ads API — might see bid prices begin to rise as DSPs compete for inventory.
Since these DSPs will be retargeting users who have already shown purchase intent, they are likely to be wiling to pay more than advertisers previously have on Facebook.
Overall, Facebook Exchange could be a key way for the social network to improve its effectiveness as an ad platform and increase revenues.
Tim Cross, Display Director, NetBooster , commented on the news: “Its clearly in response to the drop in share price. Whilst having Facebook inventory available though DSPs sounds like a good thing, historically performance display campaigns have not performed well on Facebook as users generate high volumes of impressions and their focus is on the core purpose of the sight as apposed to clicking on ads.
“That being said the targeting opportunities, retargeting etc now available have improved since Facebook last served display ads, so there is the potential to improve performance using these techniques. Additionally the advent of Real Time Bidding means that advertisers can now pay for each impression based on its true value as apposed to an arbitrary value defined by the publisher or a third party reseller.
“Interestingly there is specific mention that you will not be able to utilise Facebook’s own data to target users – however it seems there may now be an opportunity to use Facebook’s own ads platform as a means to drive highly qualified traffic to landing pages, and then remarket to those users across the wider display placements – not quite as effective but an opportunity that certainly be a win win for Facebook.
