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    Facebook Exchange lets companies bid for advertising in real-time

    Facebook Exchange lets companies bid for advertising in real-time

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    On Wednesday, Facebook confirmed plans to launch a new service that will enable real-time bidding for ad space on its platform.

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    Zuckerberg and Sandberg at NASDAQ Facebook IPO
    Zuckerberg and Sandberg at NASDAQ Facebook IPO

    On Wednesday, Facebook confirmed plans to launch a new service that will enable real-time bidding for ad space on its platform. The feature, known as Facebook Exchange, allows companies to deliver ads that are catered according to a user's browsing history across third-party sites. It's a cookie-based system similar to the one used in Google's ad network, and Facebook has already begun testing it out. In an interview with Bloomberg, company spokeswoman Annie Ta said the Exchange will launch within the "coming weeks."

    Facebook Exchange's bidding aspect, meanwhile, is designed to help companies deliver more time-sensitive advertisements. If, for example, a shoe company wants to post ads related to an NBA game, it could prepare them ahead of time, and bid for that space immediately following the game. Users who had previously visited similar sites would then see these "marketplace" ads along the right side of their News Feeds.

    Facebook will continue to deliver ads based on user "likes" and interests, though these won't be factored into the bidding process. Users won't have be able to opt-out of the program from within Facebook, but can do so via third-party vendors.

    The idea, then, is to deliver ads that are more relevant to users, while raising the value of Facebook's marketplace ad inventory. As Peter Kafka points out over at All Things D, it's still unclear whether Exchange is the first step toward a larger, internet-wide ad network, though it could go a long way toward boosting its bottom line in the short-term.