Many digital advertising observers are convinced that Facebook will eventually launch a third-party display ad network to rival, or even better, Google’s AdSense. The thinking goes, Facebook's wealth of personal data could be used to target ads all over the Internet, theoretically with far more precision than most ad networks. And consumers might be even more receptive to such ads when they're actually not on Facebook in social network mode.
And while Facebook is keeping mum on any plans to do that, the company may have tipped its hand on how such a program could operate—through a mobile pilot.
This week Facebook will begin testing the ability for advertisers to target users of third-party mobile apps and mobile sites using Facebook data. Facebook spokesperson Annie Ta said the initiative is a “really small test of just a few advertisers working directly with the Facebook team.”
Here's how it works: an advertiser places a bid with Facebook to run mobile ads against a specific target audience. The advertiser is able to use the same standard targeting parameters they use for ads on Facebook (age, gender, interests, etc.). Then Facebook's mobile ad partners alert Facebook when a person fitting that target demo visits a mobile site or app. Facebook then bids on that impression on the advertiser’s behalf, and if the bid beats out competitors’ bids, the ad gets served.
In this case, the ads are standard IAB mobile ad formats—either banners or interstitials—and can be served within Android and iOS apps, Ta said.
This isn’t the first time Facebook has shown inklings of a third-party ad network that would be similar to Google’s AdSense, replacing Google’s search-based intent data with Facebook’s social-based interest data. In June the company began running ads on Zynga.com that were directed at users according to their Facebook data. Unlike that program, however, the mobile ad targeting pilot doesn’t require an individual app or site to have users connect their Facebook accounts (like many people doing on Zynga). Instead users have to be logged in to the Facebook mobile app or mobile site.
So long as that user remains logged in to Facebook, they can be targeted within other apps or sites. But if they log out of the Facebook mobile app or site, they can no longer be targeted, Ta explained.
While only a test, the pilot is massive news for the mobile advertising landscape. In the desktop world, advertisers have long been able to track users’ behaviors using cookies. That’s not the case in mobile, where advertisers often rely on contextual targeting.
Over the past few years a slew of companies have popped up claiming to be able to mine data in order to create mobile audience models designed to replicate traditional desktop ad targeting, but Facebook’s program removes the guesswork. If an advertiser can say they want to target twentysomething women who are interested in cars, and that’s exactly what they’ll get.
Ironically advertisers don’t enjoy that level of assurance on desktop, which is why a Facebook ad network could be so powerful. But is an online ad targeting program is in the works? “Right now we have nothing to share on bringing this to desktop,” Ta said.
The mobile ad news is the most significant mobile announcement Facebook made on Tuesday, but not the only one. The company has also rolled out the ability for advertisers to run Promoted Posts via the Pages Manager mobile app. The ad-extender product received a profile boost last week when news broke that Facebook would be shuttering Reach Generator in favor of Promoted Posts, which let advertisers pay to extend the reach of individual page posts to more of their fans. At launch Promoted Posts were aimed at smaller advertisers on Facebook, but the company has expanded the product to bigger brands.