Facebook and it’s investors believe that climbing up the Exchange hill will only get them to a local maxima. If they go in that direction, they’ll be more similar to MySpace than the company they want to be…
What would happen if Facebook relented and offered the Exchange on all of its ads?
Two theories, which aren’t mutually exclusive:
Facebook’s overall revenue shoots up, as the company conforms to the way most of the Web ad world does business.
Facebook’s value flattens or drops, because Facebook will have conceded that it hasn’t been able to figure out a revolutionary new way to sell ads. Instead, it’s just like any other big Web publisher with lots of inventory. Like, say, Yahoo or AOL. That doesn’t mean it’s a bad business, but it’s a whole lot less exciting than a world-changing one.
via Facebook Ad Exchange Explainer: Interview With Triggit’s Zach Coelius – Peter Kafka – Media – AllThingsD.
Make no mistake, this is monetizing Facebook’s inventory, not its data. It’s nothing unique and it’s the same thing that MySpace has been doing for years except Facebook has created some special rules around their offering (e.g. only a handful of DSP partners selected, non IAB standard units).
The upside is that they are plugging into an existing ad exchange paradigm so Facebook doesn’t have to recreate the wheel.
It would have been interesting if Facebook tried to monetize its user data but Zuck and Co didn’t have too many options here since it would’ve caused a huge shitstorm.
If Facebook wants to plug in existing/known products to monetize it’s user base (instead of inventing something better), they may be better off focusing first on search products since there’s a lot more margin there.
Facebook Exchange: A New Way For Advertisers To Target Specific Users With Real-Time Bid Ads | TechCrunch.
via Noam Schwartz – FB retargeting?:
Facebook is currently beta testing a feature that lets advertisers target users (or friends of users) who performed a specific Open Graph action via a specific application. Together with smart CPM pricing tactics, that’s a game changer for app developers. Remember where you read it for the first time.
Users can now be targeted based on their use of the app. In this example we can target FB users who viewed a video on the app with app ID 1234567.
Again, unless you are a FB partner, preferred developer or have access to one – you’ll have to wait a bit.
Link to Facebook page with specification (last updated two months ago, April 2012):
Action Spec Targeting › Ads API › Action Spec Targeting
Facebook is beta testing a targeting feature – called “Action Spec Targeting” — for our interested Ads API partners. The new feature is designed to help advertisers target users based on actions they have performed. Because this feature is still in beta, we expect it to change. Please keep that in mind as you test this new feature in your campaigns and tools.
Action specs are used to describe actions people have taken on Open Graph objects via an application or on on-Facebook objects directly. Action Specs can be used to target Ads at users or friends of users who have performed a specific action, e.g. target an ad group at users who listened to music on a specific app or commented on a page post. Please review the the action spec documentation for more details on how action specs are defined.
Note: It is not possible to target a ‘like’ of a Facebook page via action specs. Note: Action specs are limited to be a maximum of 4096 characters in length.