March 28th, 2011

Will Ads in Real Time Be Facebook's Holy Grail?

Ad Age Digital

This could be Facebook’s Google moment.

Getting a consumer’s attention is great—and Facebook holds the most attention on the net. But knowing what a person wants and instantly matching that desire with a targeted ad is what really churns sales and has built search into a $12 billion U.S. business. This month Facebook quietly started testing its own version of intent-based advertising, delivering real-time ads based on user wall posts and status updates.

For example: Users who update their status with “Mmm, I could go for some pizza,” could get an instant ad or a coupon from Domino’s, Papa John’s or Pizza Hut.

The test, first reported by Ad Age last week, involves only 1% of Facebook users, though on the social network that’s a focus group of 6 million people. In the testing period advertisers aren’t buying real-time “relevant ads”; rather, Facebook is attempting to match existing ads in its system to status updates and wall posts in real time, based on a combination of user profile data (including at times, keywords and interests) along with the current update. But when it does come time to sell these ads, experts suggest advertisers will be willing to pay much higher prices, helping to boost the nearly $2 billion in revenue the site reaped in 2010.

Offering ads relevant to a person’s immediate needs or state is one thing. Facebook’s real opportunity—and what sets it apart from Google—lies in mixing that relevancy with all the information it already has about users based on their profiles, such as location, age and gender.

“If Facebook can combine people—who they are, how old they are, where they live—with intent, it essentially becomes the most massive ad platform ever,” said Michael Lazerow, CEO of Facebook marketer Buddy Media. “There’s no other platform in the world where there can be 10,000 people a day saying ‘I’m having a baby’ or asking ‘Hey, what’s your favorite hotel in Turks and Caicos?’”

Read more: http://adage.com/article/digital/ads-real-time-facebook-s-holy-grail/149603/

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