Sandeep Amar, Head (Marketing, Audience and Pre-Sales) at Indiatimes weighs in on the Facebook Exchange announcement. Amar blogs at sandeepamar.blogspot.com. The views expressed below are his personal views.

Facebook is all set to provide real-time retargeting solutions, called Facebook Exchange. As per comScore April’12, Facebook got 800 million plus Unique Visitors out of an internet universe of 1.5 billion, making its reach over 50% of all internet users across the world. This gives them a phenomenal advantage for retargeting solutions.

The service seems to be a standard retargeting offering. For an advertiser, once the user visits their site, a cookie is dropped on user’s machine. Later when the user visits Facebook the Exchange platform identifies the user and serves relevant advertising. With the given reach of Facebook, this solution could actually be very effective. The bidding is real-time, which gives flexibility to measure and regulate return on investment.

Google introduced retargeting last year for their advertising platform, though not from third party sites (advertiser’s site). Google retargeting works on Google Display Network. Almost all the ad-networks today provide retargeting, with Vizury being the specialist in India in this space. None of the ad-networks/Vizury provides real-time bidding for retargeting. They charge a fixed cost per click for this solution.

Fundamentally there is nothing new in this service, but Facebook’s large base does provide significant value to the advertiser. The only issue with Facebook advertising is the smaller ad size, which may not work in terms of driving volume of relevant clicks.

With the falling share price (now around $27), Facebook is desperate to make things happen in the revenue department. This solution will provide them an opportunity to have direct and continuous relationship with big advertisers especially for high value products and e-commerce sites. Facebook claims that it will provide “relevant advertising in a timely manner” – which sounds like a useful solution.

Facebook Exchange also gets Facebook into performance marketing mode, wherein as per various researches social contributes to less than 10% of online transactions through online marketing. The click volume, the relevancy and final completion of action (sale/lead) will define the success for the advertiser – and the Facebook Exchange program.

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