Facebook Inc. (NASDAQ:FB) is continuing to progress and its pursuit of consistent streams of revenue. The company has committed a staff of people to work on advertising opportunities, especially in mobile, while another group is focused on creating a search engine within the social-network platform. But there are a couple of divergent opinions about a process called ad re-targeting. Would re-targeting advertising help advertisers and Facebook Inc. (FB) bottom line by significant numbers, or would this concept scare off Facebook users? What about investors, like billionaire fund manager George Soros of Soros Fund Management?
One thesis provided by Nicholas Carlson tried to explore the value of ad re-targeting. The concept came about in recent weeks as Facebook Inc. (NASDAQ:FB) changed its ad-selling model to a Facebook Exchange, or FBX. With re-targeting, advertisers essentially “trail” a user who clicks on certain sites. For example, a user could click on Target.com and shop for a good digital camera. While the user is on the site, a “cookie” is left behind, telling advertisers that the user was on that site and give information about the items the user expressed interest in while on the site. Then, when the user leaves Target.com and goes to other sites, a Target ad with a brand of digital camera could appear on every page that user visits.
Carlson postulates that those ads have potential for Facebook Inc. (NASDAQ:FB) , as those won’t require Facebook Inc. (FB) giving up personal data for those advertisers in the Facebook Exchange, plus those advertisers will constantly be in the visual field of users, and those ads may be welcomes because they’ll be based on the users’ established “interest” in the Web site or a specific product (refer to the tracking cookies).
However, the counter-argument by Tom Hespos sees the potential value, but also wonders if having ads that essentially mimic a user’s browsing history might actually “creep” them out. And if users determine that this trailing of advertisers comes from its use of Facebook Inc. (NASDAQ:FB), would that cause users to eventually not get on Facebook as often? And if users aren’t accessing Facebook, can it justify charging higher advertising rates for re-targeting? Would users be bothered by seeing their browing history in their faces all the time, even if the items being advertised are those of interest?
Could Facebook Inc. (NASDAQ:FB) potentially triple its ad traffic, as Carlson theorizes, or could it increase its creepiness factor? What would you think about ad re-targeting? Would this change your position on Facebook Inc. (NASDAQ:FB)? Why or why not?