Facebook plans to launch "Facebook Exchange," a real-time bidding ad system where visitors to third-party websites are marked with a cookie, and can then be shown real-time bid ads related to their web browsing when they return to Facebook.
"For example a travel site could serve ads about a flight to Hawaii to someone who almost bought a flight on their site. Advertisers might pay big premiums for highly-accurate targeting. Users will be able to opt out of Facebook Exchange via third-party demand-side platforms, but they can't opt out of the program completely from within the social network," Facebook explains.
Facebook Exchange (FBX) currenlty in testing with eight advertising demand-side platforms, and it will become more widely available in the next few weeks for traditional Facebook sidebar ads charged at cost-per-thousand-impressions, but not Sponsored Stories or mobile, facebook said.
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