Facebook tests retargeted ads in main News Feed

Prime location

Facebook is now testing retargeted ads in the social network's desktop News Feed.

The Facebook Exchange service has allowed advertisers to set up and manage cookie-based retargeting campaigns since 2012. These were previously limited to the right-hand side bar, but according to the announcement yesterday, will soon be much more visible.

In a blog post, Facebook Exchange said it is running a "closed alpha test" with a small number of advertisers. The announcement also explained the reasons for extending the ads to the News Feed:

"Allowing advertisers to reach people in News Feed is important because people spend more time in News Feed than any other part of Facebook. We also believe that ads delivered through FBX will create more relevant ads for people."

The blog post went on to explain the switch will not increase the number of ads in the News Feed, and will not appear on mobile versions.

Advertising consequences

Sponsored stories have been featured in the News Feed since January 2012, utilising the individual's social activity and Likes to display a targeted ad. However, Facebook Exchange retargeting uses browser history instead, which could provide more recent and relevant data than Likes.

Another consequence for advertisers could be a lower cost per click (CPC). Research from TBG Digital found that average CPC for US advertisers dropped to a record low in Q4 2012, which was widely attributed to the introduction of News Feed ads in the US. Meanwhile Facebook advertising partner AdRoll compared standard web retargeting to Facebook Exchange retargeting over the last six months of 2012, and again found the Facebook ads had a much lower CPC.

Natalie Booth, head of search at theEword, said: "Facebook believes its billion users spend the most time engaging with the News Feed, and we've known for a long time just how effective cookie-based retargeting campaigns can be. So, combining the two could be something of a dream scenario for advertisers, but we'll have to wait and see whether it's an effective platform for conversions."