Facebook Brings Ad Tracking to Your Phone

Last year, Facebook introduced the Facebook Exchange, which let advertisers “retarget” Facebook users based on their travels outside of Facebook.

This is what everyone on the Web does. And depending on whom you ask, the fact that Facebook finally started doing it is either a really big deal or no big deal at all.

Now Facebook is going to do more retargeting, and it is going to bring it to your phone. And unlike the retargeting Facebook introduced last year, Facebook isn’t working with partners on this one — it’s handling the whole thing itself.

Is that a big deal? Facebook certainly isn’t playing it up that way. Yesterday, when it announced the move, it did so via a low-key blog post with an oblique headline.

It is possible that some of Facebook’s ad tech partners may think it’s a big deal, though, since Facebook is now competing with them — and giving itself a huge advantage in that competition.

The basics: The old Facebook Exchange lets advertisers use “cookies” to find Facebook users who have been to their sites. So Virgin Airlines, for instance, can keep showing you ads on Facebook after you’ve checked out prices for that San Francisco to New York flight on VirginAmerica.com.

While Facebook ultimately sells ad inventory through the exchange, it also keeps a bit of distance from the process, since advertisers are using data supplied by third-party vendors to target their customers. And Facebook doesn’t allow them to utilize its own data about its users when they do that.

The new product Facebook announced yesterday is different in a couple key ways:

• Unlike Facebook Exchange, it will work on mobile, which means advertisers can track users who visited their apps or mobile sites, and advertisers can run ads on Facebook’s mobile app, too.
• The other key difference is that Facebook itself is going to run this targeting effort. Instead of cookies, which don’t work on mobile anyway, Facebook will use its own code to track Facebook users on advertisers’ sites. And unlike Facebook Exchange, Facebook’s in-house targeting effort will also use Facebook’s proprietary data set about its users.

Facebook’s messaging here is that the new ads are simply an extension of what it has already been doing with its “custom audience” ads, which are supposed to help advertisers find people on Facebook using data they’ve collected about their offline behavior.

And Facebook insists that the new product isn’t competing with Facebook Exchange. It said it assumes that more sophisticated advertisers who know how to use ad tech will use the Exchange, and that it will offer its own targeting system to smaller buyers who would never use targeting otherwise.

And that could all be true.

But if I’m one of the ad tech players that was super-stoked about Facebook Exchange last year, I might be a bit worried now: Facebook is selling a product that competes with mine — even if it says it doesn’t mean to compete with me. And Facebook is selling that product on mobile, where all of its growth is coming from, and where I would love to be myself.