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29/11/2012 by

Facebook Working On External Ad Network

Facebook is reportedly looking to start up an external advertising agency.

Facebook Monetizing

This means that Facebook would allow advertisers to use Facebook information about you to target ads at you as you surf around the net. The whole reason Facebook would want to do this is because it would bring al lot of extra revenue.

In a move that may impact the privacy of its users, Facebook is planning to share data on user activity to advertisers not just inside its network but outside as well.

Chris Dixon, Co-founder/CEO of Hunch (acquired by eBay) has described this as an “embedded option” for Facebook investors:

“An external ad network is inevitable. Google proved this model with Adsense. With an already huge base of advertisers bidding on CPCs, it is impossible for most other ad networks to compete on publisher payouts. But Facebook’s traffic is so great now that an external ad network might increase their revenues by 2x or so.”

Increasing revenue is an important thing for Facebook as they are now a publicly traded company. The model would be similar to Google’s AdSense programme, something that has proven to be very popular and effective.

My opinion?

So far, Google has been king of effectiveness of targeted ads, showing people relevant ads while they search. If Facebook is able to do this right, we could see one of the first major challenges to Google’s ad dominance. Next to that I wonder if Facebook is also looking for the possibilities of monetizing the platform with in a The Fancy kind of way: Affiliates.

So what’s your opinion? Do you think Facebook is able to pull this off successfully?

About the author

Laurens Bianchi is an online marketing professional from the Netherlands and has been blogging on ViralBlog since 2008. Currently Laurens is a Managing Partner and Commercial Director at ICON&Co and Social Media Consultant for the Royal Dutch Football Association.


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