Facebook, recently, filed a patent application for the rights to an ad exchange that would utilize the company’s social data to provide advertisements and even content on websites other than those owned by the social networking firm, says a report from Business Insider. Such a development, if actually realized, would be huge for the ad industry, and could potentially hamper Google and other content recommending companies.
Ad exchange to utilize Facebook Inc’s social map
According to the patent released Thursday, the proposed exchange would first merge the information contributed by an advertiser with Facebook’s social map to look for a suitable user profile. After this, the advertiser would then be authorized to post its content on the exchange platform. Such content, along with basic ads, could include videos, pictures, news article, a Facebook wall post, etc. This means the companies providing normal ads could end up competing with Facebook ads that offer videos, or even an app for download.
Furthermore, the content available on the exchange would be delivered on the profile of an appropriate user who accesses the partner advertiser’s website. Also, if one or multiple advertisers seek to target the same category of users, then they would have to bid for the rights to distribute the content to the target group. Notably, the current patent filed by Facebook is an extension of two earlier patents registered by the company in 2011 and 2014, says the report.
Exchange could revolutionize ad industry
Facebook’s exchange, if successfully implemented, could prove a huge development in the ad industry. This is because of the company’s colossal data library of information shared by users on its website. Moreover, analysts note that the exchange could easily function on both desktop and mobile devices, and by acting as a medium of native advertising (publishing of content other than regular ads) could aid both advertisers, who purchase ads, and publishers pursuing to monetize their content.
In addition, the exchange could adversely affect Google’s ad firms and other content recommending companies such as Outbrain, Taboola, etc., which post ads and other paid content across the Internet. Such companies have a huge business today, but none of them has as much social data as Facebook.