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Facebook Making Life Easier for Advertisers

18 June 2012 in Trading Ideas

 Go, figure: Facebook is looking for new ways to grow advertising revenue.

TechCrunch reported last week that the social media site is testing and preparing to launch a real-time advertising bidding system called Facebook Exchange, which would allow the company to offer more relevant and direct advertising.

This system would mark visitors to third-party websites with a tracking cookie, and after returning to Facebook, users would be shown real-time ads that were related to their web browsing away from the social media site.

The Exchange, which will potentially debut within weeks, will have a pricing system based on the cost per thousand viewers. Spots will be sold via third-party technology partners of the company, Bloomberg reported.

Investors of the newly public company have watched Facebook’s stock slump in its earliest days, as concerns about the site’s ability to maintain high revenue growth rates have increasingly populated Wall Street.

“Facebook’s been having challenges coming up with effective advertising,” Debra Aho Williamson, an analyst at New York-based EMarketer told Bloomberg. The social media site “is hoping to use that inventory on the right side of the page to deliver advertising that is more targeted.”

Under the Exchange process, Facebook users who looked at a specific item on another site would be shown a series of similar products when they log back onto the social media site. Advertisers would bid in real time to show the user a specific ad on the right side of the user’s Facebook page, creating a more targeted marketing strategy in a matter of seconds, the Los Angeles Times reported.

Initial concerns had surfaced over privacy and user control of content, but Facebook released a statement ensuring that the move would make the site no different than before for its members, according to PC Magazine. 

“We do not share any user data with advertisers and people still have the same control over the ads they see on Facebook that they do today,” a company spokeswoman said in a statement.

Will this move help to reverse the fortunes for Facebook?

Tags: Facebook