After Facebook’s disappointing IPO and stock activity since, the company has been looking at ways to bring in some positive news and help increase its share prices. One of the problems that the company is trying to tackle is its revenue generation from ads and focusing on its underutilized mobile customer base. Tech Crunch revealed that Facebook will start testing out a new mobile ad network that it has created on Septmeebr 18. The network will work like this: advertisers will pay Facebook to place their ads on apps and mobile sites that Facebook does not own based on your Facebook data.
Facebook is looking to become the go to ad network by making use of the ton of data it has on its users. This should allow more relevant ads to be shown to the correct people. This in turn should give the advertiser more return on their marketing investment. Facebook had taken the first steps to its off-site ad placements when it put advertisements on Zynga.
As of now Facebook has not revealed too many details about advertisers, ad exchanges, ad networks, or publishers but it is a safe bet that the new ad network will be a way for Facebook to make money without hurting its user experience on the social network.
Facebook has told TechCrunch a little about how the testing will work. Users will start seeing ads on their non-Facebook apps that run on Apple’s iOS and Google’s Android. The ads will also pop up on mobile websites where a user has logged in with their Facebook account before. The system will use data like ‘age, gender, location, Likes, friends who’ve used an advertiser’s app and basically any other targeting options in Facebook’s standard ads marketplace’ as criteria to deliver the right type of advertising to the user.
For the advertiser, the system works as follows; Facebook has set up their network as a layer on top of other already established ad networks. Marketers will place a bid with Facebook to reach defined demographics. Facebook will leverage its wellspring of user data and synchronizes that with the ad exchanges. If a user logs into an app or mobile site where the ad exchange has a spot for advertising, they will contact Facebook to see if any Facebook client wants to target the user. If there is a bidder for that space then Facebook shares part of the price with the ad exchange and delivers the ad.
This should be a game changer for online ads because Facebook will be providing very targeted ads service that marketers will pay a premium to use. The other advantage is that Facebook can use its expansive user data and make money without cluttering its own social network, thereby maintaining full control over its user interface. This could be win-win situation and provide a better experience for advertisers and mobile users.
Source: Tech Crunch
Photo: Telegraph
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