Confirmed: Facebook Testing New Advertising APIs with a Few Agencies, to Expand More Broadly Soon

Earlier this year, we speculated on when Facebook would launch APIs for Facebook Ads to allow performance marketers to automate ad management. Well, it appears it’s happening now: recently, Facebook started beta testing its new advertising APIs with just a few agencies around the world.

A Facebook spokesperson confirmed the tests, saying that it will “open up to some more advertisers in the next week or so.”

Here’s why Facebook’s Ads APIs matter: Until now, direct response advertisers using Facebook Ads have had no way to build tools to manage large volumes of ads and targeting combinations. With other major performance advertising platforms, like Google AdWords, large ecosystems of ad tools have been built to help advertisers spend more money more efficiently.

Because those tools have never existed for Facebook Ads, performance advertisers have had to either manage their Facebook Ads campaigns manually, or hack their own tools. Now, Facebook is testing simple yet powerful APIs that allow agencies and advertisers to create thousands of ads with different creative and targeting permutations and optimize bids in real time.

For example, say you wanted to test which combinations of geographic targeting, demographic targeting, and keyword targeting yielded the most conversions to your social game. That could easily mean 10,000 different ads. Finding which ones perform best is now a lot easier.

In the end, this will make Facebook Ads more accessible to a broader number of advertisers and agencies, and will lead to more money flowing through the Facebook Ads platform (and more efficient pricing across different segments of the social graph). In other words, Facebook’s performance advertising revenues, which are already a major component of Facebook’s estimated $550 million in total revenues for 2009, should start to grow more quickly.

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