In its continued efforts to improve on its ad features, Facebook is currently testing a new real-time targeted advertisting system called Facebook Exchange.
According to reports, they're currently testing the new feature through 8 advertising demand-side platforms (DSPs). Real-time ads will only be usable as traditional sidebar ads - not sponsored stories or mobile advertisements.
How it works
To give you a general idea of how Facebook Exchange actually works, imagine an online store named, imaginatively, Web Store. A Facebook user goes onto Web Store to check out a product they like. Little do they know, Web Store has hired a DSP that works with Facebook Exchange. From there the following happens:
- The DSP drops a cookie on this user's computer
- They leave Web Store, unaware that Web Store has already created a pre-loaded Facebook ad for site visitors such as them
- The DSP notifies Facebook of this user's cookie so that Web Store can then send them targeted ads on the social network when they next sign in
- The user then logs into Facebook which recognises their cookie from Web Store and is confronted by a very specfic ad from Web Store
All businesses will eventually be able to do this. If multiple businesses use a DSP to store the cookie information of a Facebook user for these new ads, the ad that will display will be the one with the highest bidding prices.
There are privacy concerns with this new feature, but Facebook has said that if someone is unsettled by how weirdly specific the advertisements are, they can 'x' the ad and then opt out of all future ads tied to the respective DSP used. That said, we'll have to wait and see how these ads impact privacy.
Benefit for marketers
Putting privacy issues aside, Facebook Exchange certainly opens up new possibilities for marketers. The chief advantage, of course, is that ads can now be more targeted than ever. While the targeting options with Facebook Ads have always been good, this only further refines them to a new level.
Because of this, PPC advertising on Facebook will lessen its feel of being interruption advertising. Because the ads will more effectively reflect people's active interests - much like Google AdWords - it means that it will feel less like an interruption and more interest-based.
What do you think of this incoming feature? Great for marketers or an invasion of privacy? Share your thoughts in the comments below.