facebook already serves ads based on users’ interests—like say if they claim to be a Dodgers fan. But soon it’ll be able to deliver ads based on whether a user just visited page to pick up Dodgers tickets but bailed before buying.
Perhaps under pressure to expand its revenue offerings as a newly crowned public company, facebook has further embraced programmatic, data-driven advertising. The company has begun testing the facebook Exchange, which will bring real-time bidding to the social network’s ad platform and let brands run ads based on users’ browsing behavior outside of facebook. The facebook Exchange will launch in the coming weeks, said facebook spokesperson Annie Ta. Bloomberg first reported the news on Wednesday.
Here’s how it works. A user fires up their browser and logs onto facebook. At that point facebook drops a cookie on the user’s browser, essentially saying “Hey, this person has logged onto facebook.” As the user roams the Web outside of facebook via the cookied browser, one of the exchange’s eight demand-side platform (DSP) partners can drop its own cookie, which can be then be matched up with facebook's cookie (though the DSP does not receive data from that users personal facebook page).
Then when the user returns to facebook, the DSP can bid on a CPM basis to target that user. The winner gets to run a targeted banner ad alongside the right rail of a nonpremium facebook page (that is, not on the facebook home page, in the News Feed or on a facebook profile page). For example, a user who recently visited Motortrend.com might encounter an ad promoting SUVs.
Initially, facebook is working with eight DSPs: TellApart, Triggit, Turn, DataXu, MediaMath, AppNexus, TheTradeDesk and AdRoll. facebook said it does not plan to add any more this year, giving the eight chosen DSPs a big leg up on the competition
Users can opt out of the exchange retargeting by clicking a X button appearing in the top-right corner of an ad. They can also choose to hide an ad and tell facebook why they don’t want to see it (it’s boring, it’s offensive, etc.). Users can even request information on the source of a particular ad, and if interested can visit a DSP’s website and opt out of being targeted further.