Right to reply- Why Facebook’s u-turn on display ads is great news for advertisers, agencies and investors

This month saw Facebook open its social network to third party ad platform sfor the first time. Tim Cross, display director at NetBooster, looks at how advertisers can capitalise on this huge new market of 600 million users, while the social network’s investors now have a new line of clear revenue.


The news that Facebook is to allow ads to be purchased via a number of Demand Side Platform (DSP) partners, has been met with positivity, particularly by regular buyers across these platforms. The primary benefit here is that advertisers now have the chance to utilise the plethora of targeting tools available via DSPs including audience targeting and remarketing, to Facebooks 600mm plus users.
The more users available, the higher the chance of finding the right user for any particular campaign, so Facebook’s global audience being plugged into major DSPs is certainly not a bad thing. However one could argue that the problem is now not one of volume for all but the largest campaigns. The issue now is finding within those billions of available impressions, the right impressions and users, based on each advertisers own performance variables.
Now, what is important is the data that sits on top of that global pool of inventory allowing granular targeting to specific audience segments and valuable users.
Techniques such as re-targeting, using cookies placed on client sites, to identify users who have visited particular pages and then serve ads to them across other placements mean that you can continue to serve targeted messages to an audience that you know has already visited your site. When combined with information such as products viewed or items added to a cart you have a powerful way of extending your branding and sales beyond the walls of your own site.
The long term value here is not in Facebook’s ability to serve large volumes of ads but in the audience data that Facebook has – the data that currently powers their own Ads platform. However this data will not, at least not yet, be made available to third party advertisers via DSPs.
Instead DSPs will use third party data from other vendors such as Experian and BlueKai to target ads on Facebook to users identified as valuable elsewhere.
For Facebook the real long term value would appear to be in making that user data available for advertisers to target – not just on Facebook, but across any site available via a DSP or exchange.
Facebook could then charge a premium CPM for the use of that data and effectively become that largest market research tool/data provider in the world. Consider that their code now resides on myriad other sites – that’s a lot of data!
The only fly in the ointment is likely to be user backlash – who wants their data being used to target them with ads? The reality is it already happens all over the web – Google use keyword data to improve search and display ads, and the development of Google + was clearly a long term plan to bring more social data into search.
Ultimately Facebook needs to generate revenues in keeping with its multi-billion dollar valuation – and this move, if not the final answer, may be the first step towards generating the kinds of figures required to do this.
By Tim Cross
Display director
NetBooster
www.netbooster.com