Facebook is pushing its advertising technology beyond its website and apps to the rest of the Internet -- and into more direct competition with Google.
The world's largest social network said Sunday it will relaunch Atlas, an advertising technology it bought from Microsoft last year. The new Atlas was rebuilt to allow Facebook's partners to send ads to the company's users anywhere the service can see them on the Web.
The result is rather simple: PepsiCo, one of the advertisers who has signed on with Facebook, could use Atlas to show advertisements for a new soft drink to a specific group of people based on information the social network already knows about them such as age, location and what they like.
The move, if successful, could help Facebook expand its reach and take on Google as the top dog of Internet advertising, an industry estimated to reach more than $140 billion this year. Google lorded over nearly 32 percent of online ad spending last year, according to eMarketer, and was only expected to see that dip slightly this year. Facebook, by comparison was a distant second at 5.8 percent last year. This year, it's expected to hit 7.8 percent, still far higher than third-ranked Microsoft and fourth-place Yahoo.
At the heart of Google's success is a subsidiary called DoubleClick, which helps advertisers buy and track advertising efforts across the Web.
Google also owns AdMob, an advertising technology specifically built for mobile devices. But mobile is where the search giant's lead is rapidly eroding. Google took about half of the mobile ad industry's $17.7 billion in spending last year, and is expected to see a slight drop this year, eMarketer said. Facebook, by comparison, is seeing its fortunes grow rapidly: last year, it took nearly 18 percent of revenues and this year it could hit more than 22 percent.
The mobile advertising market is growing fast too, topping an estimated $32.7 billion in spending this year, an increase of nearly 85 percent from a year ago.
This all leads back to Facebook's renewed efforts with Atlas, and a relationship with advertising and marketing services company Omnicom Group, to work with clients like Pepsi and Intel.
Facebook's own Instagram photo-sharing service is also set to work with Atlas.
A marriage of tracking technologies
Companies have for a while been able to follow customers around the Web, targeting ads as they go. Facebook is taking this a step further, integrating mobile devices as well.
The way it works is that when a user logs into Facebook with their mobile device, it registers a special device identifier with the company's servers. This identifier can then be used to track a customer so that if another app on their phone asks for an ad, Facebook can use information about the customer to find the best ad to send their way.
The potential downside to Atlas could come from public perception. Facebook's increasingly cozy relationship with advertisers has long been a sore subject for some users, and it has inspired a host of alternative social networks, such as Ello, whose rallying cry has focused on privacy and freedom from advertisements.Facebook will use mobile identifiers, in conjunction with other information such as cookies and browser types, to more granularly target ads. Facebook has said it won't disclose people's identity to advertisers.
More likely, the technology could help to boost Facebook's fortunes. The company's mobile advertising efforts alonerepresented 62 percent of its $2.68 billion in overall advertising tallies in the second quarter, ended June 30. That was up from 41 percent the same time last year.
That's quite dramatic, particularly considering Facebook's strategy for advertising on mobile devices only began taking shape a few years ago.
Marrying mobile and desktop advertising, and making that available outside Facebook's own website and apps, could be just the thing to help boost revenues yet again.
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