Deciphering Facebook’s Ad Exchange

Facebook is still formulating ways to leverage its massive user base (which just surpassed one billion) to create new models for ad revenue. The launch this summer of its own ad exchange was a step in that direction, albeit one that draws on precedents established by Web publishers like Yahoo and AOL. How does the Exchange actually work? Peter Kafka of AllThingsD asked Triggit CEO Zach Coelius to lay out the basics. Judge for yourself how successful he is in translating ad-tech speak into plain English.

Facebook is still formulating ways to leverage its massive user base (which just surpassed one billion) to create new models for ad revenue. The launch this summer of its own ad exchange was a step in that direction, albeit one that draws on precedents established by Web publishers like Yahoo! and AOL. How does the Exchange actually work? Peter Kafka of AllThingsD asked Triggit CEO Zach Coelius to lay out the basics. Judge for yourself how successful he is in translating ad-tech speak into plain English. According to Coelius: 1) Retargeting enables advertisers to use their own customer data to target ads to specific Facebook users. 2) Advertisers can bid on these targeted ad units in real time. 3) While the ad units are small, with limited interactivity, they’re surprisingly effective. 4) Facebook’s traffic patterns—for many users, it’s always on—make it an optimal ad platform. 5) The argument that Facebook users aren’t there to buy anything doesn’t hold up, especially with real-time bidding. Facebook is ramping up its ad volume rapidly and may open up retargeting, currently offered exclusively to Exchange partners, on all of its ads.

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