Facebook filed for a patent that should cause many market participants to fret. Accordingly, work is underway on a dominant ad exchange.

Facebook patented an idea that raises an uncomfortable vision of the future for some players in the advertising ecosystem. Accordingly, the largest social network is working on an ad exchange that can play out not only display ads but also native formats on external websites.

The "Mega Ad Exchange

Lara O'Reilly reports on Business Insider about a "Mega Ad Exchange" that Facebook hopes will give it a head start in the native advertising market . The patent filed   describes how ads could be delivered to external websites based on data from the social network. This applies not only to banners, but also to native advertising formats, for example in the form of sponsored posts or branded videos, and works across devices on desktop and mobile.

Advertisers provide their data, and Facebook then selects the right people based on the company's own data and that of other partners. The content (display ad, video, article, app, etc.) is fed in by the advertisers via the exchange. The corresponding content is then delivered the next time the corresponding user lands on the page of a publisher participating in the project. The RTB-style bidding process starts and not only banners compete against each other, but also, for example, app against video.

The abstract on the Patent Office website states:

An online publisher provides content items such as advertisements to users. To enable publishers to provide content items to users who meet targeting criteria of the content items, an exchange server aggregates data about the users. The exchange server receives user data from two or more sources, including a social networking system and one or more other service providers. To protect the user's privacy, the social networking system and the service providers may provide the user data to the exchange server without identifying the user. The exchange server tracks each unique user of the social networking system and the service providers using a common identifier, enabling the exchange server to aggregate the users' data. The exchange server then applies the aggregated user data to select content items for the users, either directly or via a publisher.

The system is outlined as follows:

 

 

 

 

 

 

 

 

 

 

 

 

Source: US Patent & Trademark Office

The patent is based on two other applications, the oldest of which was filed four years ago, and not all of them have been implemented. Many ideas from the old documents are now reflected in other Facebook technologies. But if the patent is any indication of serious development work, it's a bad sign for other market players. Business Insider sees a storm on the horizon for content recommendation platforms in particular, should this idea be implemented.

Facebook's valuable data

Following the launch of the Atlas advertising network last October, the Ad Exchange could once again challenge Google for a piece of the pie. LiveRail and FBX are already two Exchanges in Facebook's portfolio, but FBX remains Facebook internal and LiveRail is focused on video . The outlined Ad Exchange goes a big step further.

The data from the social network is actually worth its weight in gold for advertisers, as users submit and enter it voluntarily. Most other providers have to be satisfied with data from the browser. The Zuckerberg network combines profile information, history from the browser, clicks on content on Facebook and data from the Social Graph. Critical information to identify users is anonymized. In addition, Facebook's tracking and targeting solutions are some of the best on the market.

Source: https://onlinemarketing.de/news/facebook-mega-ad-exchange-native-advertising