Is Facebook KILLING Google Ads?

Facebook (NASDAQ:FB) is showing better results than Google (NASDAQ:GOOG) in getting users to click on advertisements based on browsing history, according to the social network’s ad partners. Triggit, which makes software to help Facebook deliver ads, said Facebook Exchange, a real-time ad bidding system, generates four times the dollar return of other similar systems.

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Facebook Exchange was introduced by the social network in June as a direct rival to the ad networks of Google and Yahoo (NASDAQ:YHOO). In such a system, advertisers compete to deliver ads once a user’s browsing history matches a marketer’s profile.

Facebook’s stock has dropped 45 percent since its IPO in May on worries that it is unable to attract more advertisers or find success for them, especially on the rapidly growing mobile platform. But real-time bidding, which is growing rapidly in the online display advertising market, could help the social network immensely. This year, real-time bidding will represent 16 percent of the $12.6 billion U.S. market for display ads, IDC said. Facebook Exchange, or FBX, could take as much as a fifth of the market, generating $1 billion in sales by next year, Pivotal Research Group analyst Brian Wieser told Bloomberg.

If the social network achieves such success, it could start charging higher prices for ads, Zach Coelius, chief executive officer of Triggit, told Bloomberg. “Right now, it’s 25 cents to 50 cents” for every thousand users who view an ad on the social network, he said. “We expect that to go to anywhere from $1 to $2.50 in relatively short order.”

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