Before proceeding in depth to how Facebook Exchange works , let us first research what is the major difference between advertising on Facebook and Google? By typing in a search term, users of Google display “purchase intent” for a specific item, while at best Facebook users’ demographics and general interests can be identified. This means that Google is great for targeted advertisement while Facebook is better for general brand marketing.
Facebook is aiming to change this paradigm with Facebook Exchange , an imminent collaboration with a number of different Demand-Side Platforms.
At the generation of Facebook Exchange an identifying cookie is placed by Facebook on each of its users computers. This cookie allows Demand Side Platforms to recognize the users when they visit a monitored online vendor, and when the all important purchase intent is shown, the Demand Side Platforms will drop another cookie on that user computer. In the eventuality that no purchase is made the Demand Side Platforms will contact Facebook, identify the user, and then wait patiently for notification from Facebook that the marked user has returned to the social network.
The moment of “re-entry” to Facebook is important; at this point the social media platform will contact all of the Demand Side Platforms who have put a tag on the user and will open up a bidding session among them. The winner gets to show a highly targeted advertisement to the user.
Let’s say I visit the website of a gym but click out without purchasing anything nor even requesting more information. When I get back to Facebook I could find an advertisement telling me that a 6-month membership to the gym costs 50% less if I buy in the next 24 hours.
Facebook says that users who disapprove of such advertisement will be shown a link to the Demand Side Platforms where they will be able to disactivate them. However there will be no simple one click way to opt completely out of Facebook Exchange. It is hard to know how the general Facebook public will react to the targeted advertisements, while some might find them intrusive, others may be happy to see more advertisement for things they have a real interest in buying and less irrelevant distractions.
Having a highly targeted advertisement delivered on Facebook will certainly be valuable for any business, moreover the instantaneous nature of the bidding and delivery system make it the perfect terrain for the time sensitive advertising. After Usain Bolt won his 4th, 5th, and 6th gold medal in these Olympics, Visa modified their television advertisements which already featured the Jamaican sprinter to congratulate him on still being the world’s fastest runner.
Internet advertising can react to such events much more quickly than television can, and with the introduction of Facebook Exchange, Facebook and its partners will be able to identify those users who have watched a particular sporting event online and target them much in the same way that Visa is sure that it will reach Olympics sports fans by advertising on NBC.
Keep your ears open for news about Facebook Exchange, if it works it may cause a revolution in online social media marketing, making it easier for online vendors to effectively reach the section of the general public which is most relevant to the goods and services they offer.
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