Facebook is promising to use its greatest asset to help media companies make more money
The question is, will media companies, leery of Facebook's formidable and ever-growing clout in the ad business, welcome the help?
The new product in this case is Audience Direct, which is designed to help web publishers sell targeted video ads using Facebook's demographic and location data. For example, a publisher could use Audience Direct to make sure that an advertiser running a campaign aimed at women between the ages of 18 and 34 gets what they paid for.
That's not easy for many publishers, according to Brian Boland, Facebook's vice president of publisher solutions, since they don't always have very robust data on their own audiences. Publishers can work with third parties to measure the average composition of their audiences. But delivering ads only to the consumers an advertiser is interested in paying to reach can often result in guesswork and waste, said Boland.
"This is a problem that we've heard about from large video publishers," said Boland. A publisher might have to deliver 2 million ad impressions just to make sure that an advertiser gets the 1 million targeted ads it commissioned, he explained. "They end up throwing thousands of dollars out the window," he said. "This helps them solve that problem."
Facebook says in an a recent test, it was able to help a publisher deliver the right ads to 90% of a given target compared to an industry average of 59%.
Facebook has signed on ESPN,Hearst, A+E Networks and Scripps Networks as early test partners for Audience Direct.
Right now, no money is changing hands during this beta test, but the plan is to eventually figure out a business model where publishers make more money and Facebook collects some sort of fee, said Boland.
In addition, the more publishers that use Audience Direct, the more that will likely employ other Facebook ad products, or so the thinking goes. Facebook already sells ads that run on a large number of websites as part of its Facebook Audience Network.
Indeed, the potential for Audience Direct would seem to be huge. After all, Facebook has data on nearly 2 billion users, including their real names, locations and interests, so its data and technology should be able to help the average web publisher improve ad targeting precision. Media partners won't be able to pull any individual Facebook user data and won't be able to reuse this data for other ad campaigns.
Not every publisher is going to be so willing to hand over more of their advertising infrastructure to Facebook. They are seeing Facebook swallow a huge percentage of marketing budgets while leaving many a publisher fighting for scraps even as many web publishers rely on Facebook to get their content in front their audiences.
Interesting, the move puts Facebook squarely against Amazon, which late last year rolled out a set of products aimed at helping publishers learn more about their audiences and make more money. Amazon also boasts of a unique and potent data set.
Besides challenging another tech giant, Facebook's plan to helping publishers is intriguing, given that Facebook had seemingly retreated from ad tech to a degree. The company acquired the web video ad platform Liverail a few years ago, only to shut much of its down.
Boland said that deal helped Facebook learn that it didn't necessarily want to be in the ad exchange business. But in this case, Audience Direct responds to "a very specific need set we've heard loud and clear," he said. "One we are uniquely positioned to help on."