Through the service, advertisers will be able to target ads to Facebook users based on their browsing history, Facebook spokeswoman Annie Ta told Bloomberg. The ads will be served through third-party demand-side platforms (DSP) including AppNexus, DataXu, MediaMath, AdRoll and Turn, and will be priced based on the cost per thousand views. According to Bloomberg, the new service is also designed to let advertisers deliver more time-sensitive messages.
“By bidding on a specific impression rather than a larger group, advertisers are able to show people more relevant ads while
also running more efficient and effective campaigns,” the company said in a statement. As an example, Facebook said the exchange would enable a travel site to show an ad to Facebook user who searched for a flight but did not complete the booking.
For Facebook, the new exchange means more revenue potential from advertisers looking for more ways to reach users they’ve tracked elsewhere on the Web. It could also bring the social network one step closer to creating the Web-wide ad network that many think is on the way. For consumers, Facebook says the exchange means more relevant advertising, but it might be a bit of an adjustment. Even though real-time bidding networks operate across the Web, including via Google, it’s the first time Facebook has introduced this kind of approach on its platform.
Since its public debut, Facebook’s stock has dropped about 28 percent. As it tries to prove its IPO-day valuation of $100 billion, it will inevitably be under pressure to show investors that it’s willing to open up more of its platform – and, eventually, its data – to advertisers. For now, however, it seems that Facebook is roping off its contextual data about users from advertisers buying audiences through the new exchange. According to AdExchanger, the exchange partners and advertising clients will only be able to use their in-house data or information supplied by data partners, not Facebook data regarding user “likes” and other activity. In addition to holding back user data from advertisers, the social network said, users will still have the same control over ads they see on Facebook as they do now.
According to estimates from research firm eMarketer, Facebook is on track to grow its ad revenues 60 percent this year to top $5 billion.