Some of the world’s largest advertising companies have signed up to Facebook’s new real-time advertising platform, in a move that the social network hopes will bolster its revenue streams.
On Thursday, Facebook officially launched the platform, called Facebook Ad Exchange, or FBX, following months of testing. The system allows marketers to bid in real-time to buy ad impressions on the social networking site, and deliver their ads to users based on their immediate web-browsing habits, or linked to current events, such as sports results.
“Real-time marketing is getting to be a really important component of digital advertising,” said Rebecca Lieb, an analyst with the Altimeter Group. “We’ll see a lot of event-triggered marketing in the upcoming election cycle.”
The ads use information gathered from computer browsing histories to target individual Facebook users, and the ad prices fluctuate as in auction-style bidding system.
So a user who looks at shoes on a retail site could then see an ad for the same brand when clicking back to Facebook.
The capacity will help Facebook compete more directly with advertising rivals Google and Yahoo, which have long provided real-time bidding to advertisers.
Some of the agencies that have agreed to use FBX include Accuen, part of the New York-based ad group Omnicom; Xaxis, a WPP subsidiary; Interpublic Group’s Mediabrands Audience Platform; Aegis’s trading platform Amnet; and VivaKi, part of Publicis Groupe.
FBX is facilitated by several technology partners, including Turn, the cloud marketing platform.
Within one-tenth of a second, the system notifies when an ad space is available, evaluates 2,000 data points to determine the most relevant ad, calculates a price and
prompts the ad to appear.
The global real-time bidding sector is estimated to be worth some $3bn-$4bn, but industry observers expect this to reach as much as $20bn by 2015.
“With the launch of FBX, Facebook not only instantly multiplies the overall size of the real-time bidding market, it provides high-quality inventory that is brand safe and extremely targeted,” said Brian Lesser, chief executive of Xaxis.
However, the launch did little to buoy Facebook shares – down 0.6 per cent to $20.80 in early New York trading – which have fallen since its disappointing stock market debut in May.