Facebook has been having a tough time developing a robust advertising model, as the site's $10 million pay-out to charities involved in its "Sponsored Stories" push attests.
Bloomberg this morning picked up on last week's news that Facebook is developing Facebook Exchange, a platform (FBX) for real-time bidding for advertising on the site. Such a service would enhance advertisers’ reach to specific types of users based on their browsing history with prices based on cost per thousand viewers and spots sold via third-party technology partners.
The idea isn't so radical, or unexpected — as the Wall Street Journal points out, Google and Yahoo offer similar services to advertisers. But when it comes to FB's hyper-local mobile ad plans, TechCrunch says that Bloomberg read a little too much into remarks by Carolyn Everson, Facebook's head of ad sales, in an interview at the Cannes Lions advertising festival in France.
Everson merely said Facebook has been testing new ad products (which it’s been doing for years), there’s “really significant interest” in mobile news feed ads, and that “phones can be location-specific so you can start to imagine what the product evolution might look like over time, particularly for retailers.” That’s much less specficic than what Bloomberg published — that Facebook “says it’s working on a location-based mobile-advertising product that will allow companies to target users with real-time data showing their whereabouts.” Such a particular product was not confirmed.
“Facebook’s been having challenges coming up with effective advertising,” said Debra Aho Williamson, an eMarketer analyst, to Bloomberg. The company “is hoping to use that inventory on the right side of the page to deliver advertising that is more targeted.”
Real-time bidding generates about $5.08 billion, or 27% of the projected $18.9 billion to be spent on U.S. online display ads in 2015, according to researcher IDC research. Facebook bidding and retargeting could bring substantial revenue to the post-IPO-reeling network by offering more relevant direct advertising.
TechCrunch confirmed that Facebook is testing eight ad vendors' platforms — TellApart, Triggit, Turn, DataXu, MediaMath, AppNexus, TheTradeDesk, and AdRoll — for Facebook Exchange.
Separately, Facebook today acquired Face.com, an Israeli tech start-up that enables face-recogition.