Real Time Ad Targeting by Facebook: A Potential Treasure Mine for Internet Advertisers
In a novel experiment with the potential to be a landmine of treasure for internet marketers, Facebook has begun tapping real time conversations on its site for the purpose of targeting ads. The first experiment of its type, it is presently being tested only on 1% of  Facebook users the world over. However, with the vast following Facebook commands, that translates to a cool focus group of 6 million people.
To be sure, Facebook has been trying its hand at real time advertising for quite some time, the closest so far being the ‘sponsored stories’, an ad offering that reposts users’ interactions related to various brands on the side bar in the form of an ad. However, this new initiative promises to be far more comprehensive with anything uttered real time by the users being tapped for targeting ads.

For example, if any user updates their status with something like “Well, going to get new jogging shoes tomorrow”,
they may receive ads with attractive offers from Adidas or Nike immediately.
To make it clear, Facebook has not been immune to the power of targeted ads so far. It has been posting ads based on status updates and wall posts for quite some time now. However, these ads are not based on real time conversations. They are based on aggregate posts and updates of different users collected overtime. Keywords, that remain unused more often than not, are only a small link in this targeting exercise.
Delivering ads real time, based on just concluded conversations, calls for a complex mechanism which will have to be changed and perfected continuously. According to Facebook, the present experiment aims at finding out whether such ads can be delivered at all – finding an ad matching the just concluded, or even still going on, conversation, and delivering it at split second speeds!

If this real time ad delivery is perfected, the mere mention of expecting a baby, planning a jogging regimen, buying an electric drill, or getting a pair of high heeled shoes, will become an opportunity for the manufacturers or marketers of brands dealing with concerned products. Needless to say, it will expand the target market exponentially, to an extent that could never be possible with traditional targeting methods on Facebook, such as user preferences stated in their profiles, or even with record of conversations collected over time. Facebook has not created any new ads for this experiment, nor has it deployed any particular advertisers – the experiment is being conducted with the inventory as it is now.

An idea of the superiority of this new targeting method over traditional ones can be had by this example: A user might not have mentioned soccer as his interest, he might not have flipped through any soccer pages either; however just his sharing of the trip to the pub before the World Cup makes him a part of the target market of Adidas. As a user expresses a desire and ponders over how to fulfill it, it gives advertisers marketing products related to that desire, the invaluable chance to attract the user at that delicate, decisive moment itself – that is the power of real time advertising.
According to Reggie Bradford, CEO Vitrue, a Facebook software and marketing company, delivering relevant ads on time is a long held promise and it’s great that Facebook is moving towards the direction of fulfilling it. Not only Facebook, this new concept is driving a massive market shift and companies like Groupon are already pivoting towards it. Facebook, with its vast following, however, is in the best position to dominate it.

Ads on Facebook have not really been able to tap its vast potential so far. Users have often said that they are so engrossed in their conversations or other activities on Facebook, they hardly notice the ads. Those few who do notice, say they are not really relevant to them and don’t suit their interests or desires at the moment. This new targeting attempt promises to alter the situation by tapping the mood of users at the moment and delivering ads to them immediately, so that it is able to affect their decision in a way positive to the advertiser.

However, the targeting may not be foolproof, at least not till the time the method is perfected. Discovering any commercial intent behind a user’s statement will ultimately be a function of the quality of the new ad mechanism. As said by Debra Aho Williamson, an eMarketer and social media analyst, it might result in delivering wrong ads that may unfortunately spoil the mood of the reader, if the ad mechanism is not able to target ads correctly. Still, real time targeting does have the potential of tapping the swells of moods, emotions and sentiments, being expressed continuously on the Facebook by users the world over. It can improve the users’ perception of the Facebook ads, as well as the actual commercial performance of these ads, to an unprecedented level.
Even though Facebook has been the route of some extremely successful ad campaigns by big brands like Ford or Kia, the average click through rate for its display ads is abysmally low –  according to Webtrends, it was a minuscule 0.051% in 2010, which is just about half the industry average.  The new targeting method promises to radically alter the picture.
In the meantime, a Facebook spokesman has said that the experiment will go on indefinitely. However, he declined to discuss results so far, or to comment further on the matter.