After its rocky IPO last year, Facebook has started to see success with its mobile and web ad revenues- and Atlas could help it develop an ad network for social media to rival Google’s DoubleClick.
Facebook bought Atlas from Microsoft last month, giving the social network an advertising technology platform that tracks online purchases and provides insights about the usefulness of online ads.
Via the acquisition, Facebook has now opportunity to leverage its user data to better target advertisements as well as improve and fine tune its current ads.
Atlas is part of an online advertising service called aQuantive, which Microsoft Corp. bought for $6.3 billion in 2007. Aquantive didn’t bring in as much online ad revenue as Microsoft envisioned, prompting the software maker to absorb a $6.2 billion charge last year that resulted in its first quarterly loss in its 26-year history as a public company.
Although Facebook has been tight lipped over just how it will use Atlas’ technology, it could take Atlas’ capabilities at operating across the Web, combine them with Facebook social graph data, create a new ad network and go after the third-party ad serving business- much in the same way Google did with its DoubleClick acquisition back in 2007.
Atlas can complement Facebook’s ad efforts by giving it access to its proprietary data. Facebook will have the opportunity to better understand what type of ads are being successful outside its network, and how it can make sure that those customers buy goods and services through its social network instead.
Meanwhile, Facebook’s privacy changes from last May allow the site to leverage user data to serve ads to users while they’re not on Facebook.
It will also help Facebook in marketing its platform to its customers by showing how these ads are leading to purchases- providing that much sought after ROI measurement for social media campaigns.
The number of ads within Facebook’s mobile feeds have increased significantly and their effectiveness is also driving its ad pricing up.
For example, the company launched a huge mobile advertising campaign for Wal-Mart over Christmas in the US.
50 million ads on deals and discounts were rolled out to millions of Facebook users, to mixed results. While there was high level of user engagement, they also complained about unwanted ads- an area that Atlas could help with.
Facebook already analyses the interests that people share on its social network to target ads at certain audiences. Those insights helped Facebook sell $4.3 billion in advertising last year, a 36 percent increase from 2011.
But that wasn’t enough to satisfy investors who want Facebook to grow at a faster rate.
The question now is how quickly and successfully Facebook can integrate its data with Atlas’ tools, and whether they can avoid a privacy backlash as they do so.
