When Google launched their content network in 2003, it was the wild west. Advertisers got burned giving thousands of dollars to spammy websites who gamed the system. Intense advancements in Google’s semantic targeting algorithm over subsequent years led to much better targeting. Along the way Google became transparent and started to reveal performance data on exact ad placements on specific URLs.
In 2010, their massive content partner inventory was renamed the Google Display Network. The most dramatic results have involved focusing less on content targeting and more on user targeting. Remarketing and interest-based targeting have both launched on the Google Display Network over the past couple years. Especially when combined with traditional content targeting, user-based targeting has finally made display advertising viable for online retailers.
Facebook wants this business. Yet the perennial complaint with Facebook advertising has been that users are on the site to socialize, not to engage in commerce. Even with all the data points and user interest targeting options, Facebook advertising continues to be lackluster with the possible exception of advertising to your specific fans.
Well, Facebook is now testing the waters with building their own display network. The initial run of off-Facebook ads was first reported on June 22nd. Ads from their Open Graph are being tested on the site of top partner Zynga.com. Remember, Google wasn’t profitable until they really figured out advertising. Facebook hasn’t yet hit the sweet spot of ultra-profitability. Their existing advertising model is in need of a major change.
A Facebook Display Network would have massive advantages over the Google Display Network.
Google also keeps tabs on everyone passing through Google.com, but this knowledge is transient… user data for serving ads is anonymous and can be thwarted by simply deleting your cookies. Even if you don’t delete your cookies, unless you are logged into your Google account, your usage data and interests won’t pass between the devices you use during the day — such as desktop, tablet, or mobile phone.
Facebook users, on the other hand, seem to always be logged in on every device they own. Like buttons splattered across the Internet take advantage of this nicely. In fact, the seeds of their Display Network have already been sown in the relationships they have formed with these website owners.
Even with all of Facebook’s user knowledge, a Facebook Display Network that also had contextual awareness would truly be killer. Google display ads always seem to perform best when user and contextual targeting are combined. Getting the user data is the hard part. Facebook has done this exceptionally well.
Now their next step is unfolding. Their Facebook Exchange remarketing/retargeting platform is receiving advertiser praise. The rollout still appears to be in beta, but this development means everything to Facebook. Expect continuous advancements with both retail advertisers and Facebook coming out as winners.