The idea is to increase Facebook’s advertising reach without further cluttering the feeds of its users. How It Works Traditional advertising on Facebook has occurred directly within the timeline of those who use Facebook. This advertising has appeared in sponsored links, ads disguised as organic posts, and as text-based ads on the sidebar of Facebook’s desktop site. However, there is little bandwidth left on Facebook’s platform to incorporate additional advertising.
Facebook’s only option, then, is to move outside of their platform and find new venues where they can place advertisements. That’s where the third-party apps come in. What’s the Benefit? Most free apps are ad-based, meaning that they rely on ad revenue (or donations from users who want to eliminate ads) to fund their products. These ads come from ad networks that are already established. Facebook’s idea is to enter this marketplace and turn it on its head.
Unlike other ad networks, Facebook has an endless supply of data about people of all ages and backgrounds. Using this information, they can target an audience better than any other ad network. On paper, this creates a mutualistic relationship; Facebook builds a new revenue stream while app developers receive increased click rates and ad dollars. Users also receive more relevant ads, theoretically enhancing their enjoyment of their apps.
The Facebook third party ad network will not impact Facebook direct response advertising or any other advertising that is done directly on Facebook. By all accounts, the third-party apps will display similar or identical ads, albeit with more targeting and with the money cycle moving in a different way. Only time will tell if conventional Facebook advertising will find its way onto these apps in the future.