Facebook Will Use Facebook Data to Sell Ads on Sites That Aren't Facebook
Investors and analysts spent years clamoring for Facebook to start up an ad network, and earlier this year it obliged them. — And now Facebook is rolling out another one. — Caveat — this isn't an ad network in a formal sense.
Context & Ripple Effects
This is Facebook's third run at selling ads outside its own walls, and the most deliberate. A social ad network surfaced as far back as October 2007, ads were tested inside third-party applications in February 2009, and a mobile ad network beta followed in September 2012 — each time the blocker was the same question of how far Facebook data should travel. What changed by 2014 was pressure: investors and analysts had spent years demanding an ad network, and Facebook answered in April with the Facebook Audience Network, which let advertisers extend News Feed targeting into other apps.
The step announced on September 29 extends that same playbook to the open web — sites that are not Facebook and are not apps — using Facebook data to aim the ads, though Re/code notes Facebook stops short of calling it a formal ad network. The breadth of same-day pickup (the Times, WSJ, Bloomberg, Wired, Gigaom, Slate and others) signals how seriously the market treats any move of Facebook's identity graph off-platform, especially in the same month the company began testing a Buy button with Stripe behind it.
First-order effects
- Advertisers can now buy Facebook-targeted impressions on third-party websites, so campaigns built on Facebook profiles stop ending at Facebook's border — directly expanding sellable inventory for the Audience Network business launched in April.
- Web publishers gain a new premium demand source whose pricing rests on Facebook's user data rather than their own audience information, at the cost of letting Facebook cookies-and-profiles operate on their pages.
Second-order effects
- Display ad networks and exchanges whose pitch was scale-without-first-party-data — Google's network above all — face a rival that can promise richer targeting on the same publisher pages, pressuring their rates and forcing them to argue the privacy angle instead.
- Publishers now have to choose between Facebook's higher-yielding, data-backed demand and keeping their audience relationships independent, a tension sharpened by the real-name-policy backlash that same month boosting Ello's anti-tracking manifesto.
Third-order effects
- If the pattern holds, web advertising consolidates around a few companies that own login-grade identity — Facebook and Google — with everyone else renting targeting rather than owning it, echoing the trajectory from the 2007 and 2012 attempts to today's rollout.
- Each extension of Facebook data off-platform raises the regulatory and user-trust stakes: the more the profile follows the user across the web, the more likely ad tracking becomes a policy fight rather than merely a competitive one.
The trend: Advertising is shifting from site-owned audiences to identity graphs that follow users across the web, with Facebook exporting its targeting beyond its own pages after years of investor pressure.