Facebook Wants to Help Pepsi Follow You Across the Internet

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Facebook CEO Mark Zuckerberg delivers the opening kenote at the Facebook f8 conference on April 30, 2014 in San Francisco, California. Facebook CEO Mark Zuckerberg kicked off the annual one-day F8 developers conference.
That's cool with you, right?Photo: Justin Sullivan/Getty Images

Today is the first day of Advertising Week, and this year’s confab is already buzzing over what will almost certainly be the week’s big news: the long-awaited relaunch of Facebook’s new ad platform, called Atlas.

The basic gist of Atlas is this: It’s a tool that allows advertisers to show ads to Facebook users, targeting them using information they’ve posted to Facebook, on sites and apps that aren’t necessarily Facebook-related. An example of how Atlas will work, according to the Times: “if PepsiCo … wanted to reach college age men with ads for its Mountain Dew Baja Blast, it could use Atlas to identify several million of those potential customers and show each of them a dozen ads for the soft drink on game apps, sports and video sites.”

Why is this important? Because, for years, Google has had a lock on these kinds of targeted marketing efforts through its ad-tech platform, DoubleClick. DoubleClick handles the vast majority of these campaigns right now, which means that if you saw an ad for Pampers on a site after searching for “how to prevent diaper rash,” the site that sold that ad space probably did it through Google, and used Google’s troves of data to target users who had recently searched for information about diapers. Now Facebook wants to one-up Google by giving corporations a more precise way to target users and follow them across the internet to see what they’re clicking and buying.

Slice through the jargon, and it appears that the notable things about Facebook’s Atlas are:

A better way to target users on mobile devices, no matter which apps they’re using. DoubleClick works by placing cookies on sites within Google’s ad network, and using those cookies to track user behavior and make sure they’re seeing relevant ads. The cookie system has powered internet advertising for more than a decade. But cookies don’t work well on mobile devices, which gives Facebook an opening. Instead of cookies, Atlas uses Facebook’s Connect infrastructure to track users across their devices. (In other words, if you use your Facebook credentials to log in to an app like Uber, Facebook will know what you’re doing on Uber, and can sell that data to advertisers, even if you’ve never posted about Uber on Facebook.) This kind of cross-device tracking ability is a goldmine for advertisers.

People spend more time on mobile than on desktop, but marketers don’t spend there because cookies don’t work,” an ad executive told The Wall Street Journal. “This could finally enable us to spend more money in mobile.”

A better way for companies to tell if their ads are working. This is part of what’s known as the “attribution” problem within the ad world. When John Doe sees a J.Crew ad on Instagram and buys a J.Crew sweater at the mall a day later, there’s no way for J.Crew to know that those two events were connected. Except now, with Atlas, Facebook says it could tell J.Crew that the Facebook account associated with John’s email address had been shown a J.Crew ad on Instagram just a day before he went to the mall. J.Crew would then know that its ad strategy had paid off, and Atlas would get “attribution” for John’s purchase. And that would make Atlas very, very valuable, both for J.Crew and for Facebook itself.

The ability to improve the ads on your Facebook feed. As Re/code’s Peter Kafka says, one benefit of Atlas could be indirectly helping Facebook improve the precision of the ads it shows its own users. “If Facebook can convince more publishers to let it into their ad business, it’s ultimately going to glean information that will makes its own ads, on its own properties, much more powerful,” Kafka says. 

A way to keep Facebook feeds from getting even more cluttered with ads. Facebook has long had a core dilemma: the way it makes money is by selling space on users’ profiles to advertisers. But when it shoves too many ads into users’ news feeds, they get annoyed and spend less time on Facebook, making those ads less valuable. The solution Atlas could provide is giving Facebook a chance to handle more ads without actually showing those ads on Facebook. In AdAge’s words:

Facebook doesn’t want to overwhelm users with ads, but it also doesn’t want to turn away advertisers to the point that they take their budgets elsewhere. So if Facebook the business wants advertisers’ money but Facebook the social network doesn’t want their ads, Facebook the company needs to find somewhere else to stick them.

With Atlas, in other words, Facebook can take J.Crew’s money and use it to purchase ads on a non-Facebook site or app, while keeping a chunk for itself, without diluting its users’ core Facebook experience. How nice!

As with almost all innovations within the online-advertising world, Facebook Atlas is sure to provoke fear among privacy worrywarts. (Among other things, users will now be tracked by Facebook for the purposes of selling ads on third-party sites even when they’re not using Facebook itself. Facebook’s preemptive defense is that it won’t collect and distribute data on individual users to advertisers, just aggregated and anonymized cross-sections.) But really, this is just Facebook catching up to what Google has been doing for years. And anyway, it’s less creepy than Beacon.