Facebook will introduce a new format for paid advertising through the site; adopting the same real-time bidding framework which is already employed by Google and other major internet brands.
The social network is exploring new ways to handle PPC through the site in order to improve and establish the effectiveness of brand advertising through the site.
Facebook Exchange will allow companies to advertise to specific users based upon the person’s browsing history. Bid prices will be based on the cost per thousand views and all sales will be handled by third party technology partners.
Company spokesman, Annie Ta, said that the format would debut within a matter of weeks.
Business and financial market news site, Bloomberg, reports that Facebook stock has fallen 26% since its stock market debut, and many in the financial industry place the blame upon the networks failure to capitalise on ad revenue opportunities. Facebook’s membership base continues to grow, but the site has managed to capitalise on this through on-site targeted advertising.
Some, including former Facebook advertisers, General Motors, have questioned the effectiveness of advertising via the social media site; so it is understandable that the site would look to improve its advertising strategy.
Brands and marketers will use Facebook Exchange to target certain users who have perused relevant websites in the past. It does so using cookies or small pieces of code to track web activity.
Facebook will not be alone in employing this advertising infrastructure. It is estimated that real time bidding will account for more than $5 billion of the $18.9 billion spent on display ads in 2015; in the United States alone. This is a percentage of around 27%.