Facebook Inc (NASDAQ:FB) announced last week that it was upgrading its Atlas ad server, and analysts are wondering whether the social network’s data will be enough to convince customers to opt for Facebook instead of competitors. The social network bought Atlas from Microsoft last year.
The importance of ad servers
In a report dated Oct. 3, 2014, Pivotal Research analyst Brian Wieser highlighted how important third-party ad servers are in the online advertising world. The servers enable both agencies and advertisers to manage their digital media campaigns.
Gates Capital Management's ECF Value Funds have a fantastic track record. The funds (full-name Excess Cash Flow Value Funds), which invest in an event-driven equity and credit strategy, have produced a 12.6% annualised return over the past 26 years. The funds added 7.7% overall in the second half of 2022, outperforming the 3.4% return for Read More
Ad servers enable advertisers to count all of the impressions that were delivered and decide how much they pay for their advertising campaigns. According to Wieser, if the ad server is operated by a third party, it is the arbiter and the advertiser’s selected server. However, if the ad server is on-site, then the media owner’s selected server plays the role of arbiter instead.
Facebook upgrades Atlas ad server
The Pivotal analyst said he’s sure that Facebook’s new ad server will be better than the previous version. Of course it’s too early to know if the social network’s new product will be good enough to close the gap between Facebook and Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG), which currently dominates that market.
He does suggest that using Facebook’s data could offer an advantage to advertisers in terms of targeting ad campaigns. He also points out though that competitors also have ways to target ad campaigns, and it’s just too early to know whether Facebook’s targeting will be better, just as good as, or worse than competitors’ targeting capabilities.
Possible problems with Facebook’s new ad server
The analyst also points out that there are some potentially negative aspects of Facebook’s upgraded Atlas server. For example, AdExchanger noted some limitations on the new server. The main one seems to be that marketers are restricted in mixing Facebook’s cross-device data with other types of data from first and third parties that are housed in outside platforms like Acxiom. This means that while the new Atlas is optimized for mobile advertising, it doesn’t use data from other places.
Another negative of Facebook’s upgraded ad server is that the server doesn’t allow its own cross-device data to go out, which AdExchanger believes will “restrict its usefulness as an ad-tracking standard.”