Facebook is intent on making sure that you see the ads that you need to see. Facebook is currently testing an ad targeting option called “Facebook Exchange” to better determine what ads you need to see on Facebook while you’re on their website.

Facebook Exchange is a bidding-based ad system that serves up ads related to a user’s web browsing activity in real time. Facebook is currently testing the new service with 8 advertising demand-side platforms (DSP). The test is limited for the time being but will be opened up in the near future according to Facebook.

How Facebook Exchange Works:

It is actually surreal how this advertising feature works. Let’s take a closer look.

  • First, you visit a website looking for a product. If that website you visited is one that has hired one of the demand-side platforms (DSP), it leaves a cookie on your computer. This normally occurs when the shopper shows “purchase intent” by way of placing an item in their cart and proceeding to check-out but then they do not purchase the item. Instead they leave website.
  • The DSP notifies Facebook and gives them your anonymous user ID, so that Facebook can target you with their ads.
  • You then proceed to visit Facebook, which recognizes the cookie that was left on your computer, and the DSP gets notified that you are on Facebook.
  • The DSP has the opportunity to make real-time bid to display the partnering website’s ad to you. The DSP that makes the highest bid gets the opportunity to display their pre-designed targeted ad to you.

Security is definitely an issue and according to Facebook the only solution is that you have to opt out from the DSP that displayed the ad. Which begs the question, who has time to opt out from every DSP?

What do you think of Facebook Exchange? Is this an invasion of your privacy? Leave us a comment below and let us know your thoughts. As always, please feel free to share this article with friends.

cross hairsimage credit: pasa47 on flickr

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