Facebook bites bullet: Advertisers can now bid for your cookies

Facebook will soon be launching the Facebook Exchange, which is a real-time bidding ad system, reports TechCrunch. The social networking site has been facing questions over its revenues ever since it went public on Nasdaq on May 18. So how exactly will the new form of advertising help Facebook? TechCrunch has all the technical details about the system. Facebook will now use cookies to help provide more real-time ads for users on Facebook. So for instance if a user visits a third-party website to say purchase or not purchase something, Facebook will use the cookie to give advertisers real-time bids based on that info. Users will end up seeing the most relevant ad based on their web-browsing when they return to Facebook. As TechCrunch notes, This retargeting option could be a huge money maker for Facebook as it will allow for more relevant direct advertising.  Is this a drastically new method of making money on the web? Not really. The technology is already used by Google and other web companies to ensure more effective advertising. For more on how real-time advertising bids work you can click here. [caption id=“attachment_343045” align=“alignleft” width=“380” caption=“Reuters”] [/caption] Thankfully users will get the option to sign out of Facebook Exchange. According to Bloomberg

The service, Facebook Exchange, will let advertisers reach specific types of users on the social network based on their browsing history, Annie Ta, a company spokeswoman, said in an interview yesterday. Prices will be based on the cost per thousand viewers and spots will be sold via third-party technology partners. It will debut within weeks, she said.

The new real-time advertising bid system will also help advertisers deliver more time-sensitive messages, according to the Bloomberg report. Does this mean that Facebook will be tracking your every move online? As Peter Kafka at AllthingsD writes, It’s not Facebook’s attempt to create an ad network that extends beyond Facebook.com itself and onto the rest of the Web. This is what, for instance, Google does. In short, Facebook is selling some of its inventory to advertisers who want to target very specific users, real time. And the cookie-method is not exactly new as many exchanges already use this including Google. Also users can go to their cache history to clear up browser cookie data if they don’t want to keep signing out of Facebook Exchange ads. On Tuesday a ComScore study said that marketing on the world’s Facebook could help increase sales. Just recently Facebook introduced sponsored stories for users. The stories will appear in the newsfeeds of Facebook users unlike regular ads on the right-hand side. The sponsored stories appears if friends of a user like a product on Facebook, or comment on a brand-page.