What is Facebook Exchange and How Does It Work?
Facebook is most popular social networking site, therefore, many companies use Facebook Pages as a way to market. To this point in time, many companies have had good success but are always looking for ways to cherry pick the hottest prospects. Now, this dream may have become a reality as the social media giant recently announced it will begin rolling out Facebook Exchange. With Facebook Exchange, companies can market to their Fans using marketing cookies. Companies have used marketing cookies for sometime but what Facebook is proposing is to offer real-time bidding based on the user’s activity online.
What is Facebook Exchange?
Facebook Exchange is the newest way that advertisers can reach their niche audience, which could end up becoming the new way that advertisers get the results they want. This feature will offer a new advertising service that will allow advertisers to retarget users and bid in real-time based on a user’s recent browsing activity. Specifically, advertisers will be able to reach users based on their browsing history elsewhere on the Web. What this means is that marketers will be able to specifically advertise to people who have shown interest in their product or service based on their recent website visits!
How exciting is this for marketers?
Facebook has stated that the advertisers will be able to bid on a specific ad impression, which targets a user better than ads based on a possible interest to a group. The advertising in this case shows ads to those that have shown interest in something similar they had previously showed interest in.
The key feature of this new exchange system is the cookie is not dropped on the user’s computer unless he or she has actually showed interest in buying. For instance, a user that appeared to be booking travel plans on a specific site but did not actually make the purchase could then be shown ads on Facebook that would be similar, which is retargeting the user.
For users that do not want to be targeted, they can opt out of third party advertisers but Facebook is not giving users the option of opting out of having the cookie dropped, for now at least. Not only can businesses benefit from specific target marketing but Facebook will also benefit and this could turn into a huge money making tool for the company. Not only that, but they could be setting a new trend for specific marketing to individuals that could in fact, have a huge impact on how online marketing and advertisement is carried out.
How Does Facebook Exchange Work?
According to TechCrunch.com, here’s how Facebook Exchange works:
- A user visits a travel site that’s hired a DSP rigged up with Facebook Exchange
- A cookie is dropped on that user’s computer, typically when they’ve shown purchase intent
- If the user fails to make a purchase, or the advertiser wants to market to them more, the DSP contacts Facebook and gives them the user they wish to target’s anonymous User ID
- The advertiser pre-loads creative for ads that would target that user
- When the user visits Facebook it recognizes the cookie dropped by the DSP
- The DSP is notified and allowed to make a real-time bid to show the user ads
- The DSPs with the highest bids get their highly-targeted ads shown to the user
- If the user disapproves of being shown the ad and ‘X’s it out, they’re shown a link to the DSP where they can opt out of future Facebook Exchange ads
Source: http://techcrunch.com/2012/06/13/facebook-exchange/
Will Facebook Exchange be a game changer for marketers or will it only prove to be a small tool that is used along with the other types of online advertising? As Exchange begins to roll out there will be some hiccups in the beginning as is the case with any tool that is newly implemented. Facebook seems to release updates and other new items that always do have a certain amount of bugs, but once these are ironed out – it could prove quite useful. What do you think? Leave a comment below.
Pic: http://www.adexchanger.com/ad-exchange-news/facebook-exchange-limitations/