Facebook is testing and will soon launch a service that allows marketers to retarget users and bid in real-time based on their recent browsing activity. Facebook Exchange is set to debut within weeks, with pricing based on the cost per thousand impressions (CPM) and ad spots sold via third-party partners, according to Facebook spokesperson Annie Ta’s statement to Bloomberg.
Facebook will place cookies on users’ browsers, which partner sites will use to identify members of the social network, Ta explained. Facebook will not offer a way for users to block these interactions; that will be the responsibility of the third-party partners.
This type of technology is already available to Google advertisers. It allows marketers to display specific types of ads to users who indicated some type of intent through their browsing history or by completing some kind of action on an outside site.
Advertisers will not be able to use contextual or affinity-based targeting options open to Facebook Ads advertisers; they can only use information they have in-house or through data partners. For example, an advertiser could target users who searched for “Disney vacations” and abandoned the search, but they can’t target Facebook users who like the term “Disney.”
The list of Facebook approved DSP (demand side platform) partners currently includes Triggit, Turn, DataXu, MediaMath, AppNexus, TheTradeDesk, and AdRoll.
Real-time bidding will account for about 27 percent of the projected $18.9 billion to be spent on U.S. online display ads in 2015, according to researcher IDC.
"Real-time bidding–based display advertising sales will take the online advertising industries in developed nations by storm," said Karsten Weide, IDC's VP of Media and Advertising. "By 2015, we estimate that at least one-fifth of all display advertising sales revenue in the United States, the United Kingdom, Germany, and France will be based on RTB transactions. What drives this explosive growth is that both publishers and advertisers win – the former can expect better return on investment (ROI), the latter a better return on advertising spending (ROAS)."