Facebook Finally Offers Real Time Bidding On Ad Space, It’s About Time

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I can’t help but think I’m not alone when I say that I’ve never seen an advertisement on Facebook Inc (NASDAQ:FB). I guess I’m simply too busy wondering what’s going on down on my mother’s Zynga Inc (NASDAQ:ZNGA) farm. Perhaps, it’s just all those pictures and videos of cats acting crazy. All this without even mentioning the amount of time I spend with the “high-brow” humor that comes from following George Takei.

Facebook Finally Offers Real Time Bidding On Ad Space, It's About Time

Now I fear, I’m going to notice each and every ad the moment I log on, owing to the news I’ve read this morning. For example, I had never heard of that atrocious boy band One Direction, nor their song “What Makes You Beautiful.” That is, until I watched Stephen Colbert tear into this pop dross last week. Following his report, I spent the whole day humming that mind numbingly simple trash, of which I was, until recently, blissfully ignorant. I also trust my body to do my breathing for me. Unfortunately, once you start consciously think of breathing you’re in control, and that simple process becomes something you’re responsible for, lest you die- at least for a few minutes.

In fact, I know I’m not alone. Only 1 in 5 Facebook users have ever clicked on an advertisement, according to a Reuters report last week. This from a user base that is rapidly approaching a billion people.

Yesterday, Facebook Inc (NASDAQ:FB) announced Facebook Ad Exchange (FBX), a new service that will allow advertisers to bid in real time for ad space, within a tenth of a second of it becoming available. This is clearly a response to their horrible IPO and questions about Facebook’s ability to generate ad revenue like rivals, Google Inc (NASDAQ:GOOG) and Yahoo! Inc. (NASDAQ:YHOO).

Using cookies, advertisers will be able to target users based on their browsing history and Facebook users will have no options to turn off this function.

It’s really quite surprising that it has taken Facebook Inc (NASDAQ:FB) this long, given the fact that real-time bidding will account for about $5.08 billion, or 27 percent, of the projected $18.9 billion to be spent on U.S. online display ads in 2015, according to researcher IDC. This is a huge amount of money. Last year, real-time bids generated $1.07 billion, or 9.8 percent, of display ad sales.

This “late” move is just another example of Zuckerberg’s disdain for money, despite having quite a bit of it himself. His constant languishing in this area is something that investors and The Street will no longer abide. Suffering haughtiness and fools has never been the market’s forte.

In what can only be viewed as the acme of understatement, “Facebook’s been having challenges coming up with effective advertising,” said Debra Aho Williamson, an analyst at New York-based EMarketer Inc. The company “is hoping to use that inventory on the right side of the page to deliver advertising that is more targeted,” she said.

Better late than never.

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