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Facebook Tests Real-Time Ad Targeting

Earlier this week, we discussed how Facebook has begun to test ads targeted at status updates and wall posts.  Today, we learned that they have also begun testing real-time targeted ads among 1% of users (about six million).

Facebook mega horn and target people

The site currently offers targeted advertisements that can be aimed at different kinds of content within a users Facebook profile.  Implemented earlier this year by Facebook, is closest type of targeting to real-time targeting; ‘sponsored stories’ ads.  A sponsored stories ad is an ad in which a user’s interaction with a particular brand becomes posted on the side bar on Facebook and can be seen by the user’s friends.  Now with this updated model of ad targeting, individuals can be targeted with ads based on real-time commenting.  Specifically, as a user posts a comment, words within the comment are automatically converted to keywords that can be targeted by advertisers.

For example, if an individual were to update their status with “Going shopping for new running shoes today!”, ads for Nike or Finish Line would be seen instantaneously.

The algorithm, for delivering these ads to users, is of course complex and the real test for this type of targeting is speed.  In order for these ads to be effective, ads would need to be visible immediately.  If Facebook’s algorithm is able to match and deliver speedy real-time targeted ads, it would allow for these ads to have a greater audience than “likes” or the information a user’s profile could ever provide.  While some may find this sort of targeting invasive, the potential success rate of a real-time targeted ad is significantly improved compared to any other forms of advertising.

Facebook Targeted Real Time Ads

Beyond the value of speed and relatively, these ads drastically improve what advertisers know about a Facebook user.  A user’s Facebook profile may not have  mentioned ‘running’ as an interest, they may not have previously clicked on a ‘running shoes’ advertisement or “liked” the store Finish Line, but simply by sharing with their friends their shopping trip, they provide advertisers with an opportunity to target.  Irnia Slutsky, from AdAge; hit the nail on the head with her statement regarding the potential of these real-time ads, “The moment between a potential customer expressing a desire and deciding on how to fulfill that desire is an advertiser sweet spot, and the real-time ad model puts advertisers in front of a user at that very delicate, decisive moment.”

Even if Facebook is able to secure instantaneous ad placement with their algorithm, they still will have the problem of interpreting the intent of the user’s statement.  A user posting, “I hate when women wear running shoes in the shopping mall,” could be targeted based on the same “running shoes” or “shopping” keywords, yet this user has no desire to buy running shoes.  But conversely, an algorithm which can decipher whether an individual has any commercial intent in their status update, would bring these advertisements to the next level.

Image of Facebook people talking through comments

This premise, of sentimental real-time targeting using Facebook status updates, expands upon the ongoing attempt that marketers on Twitter have been trying unsuccessfully to master.

If successful on Facebook, real-time targeted ads would provide an expansive set of choices for promotions and unveil a pivotal and powerful market shift in advertising.  Furthermore, the addition of these ads to Facebook’s platform could considerably expand Facebook’s revenue.

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