Online advertising is what keeps the Internet going, but it has some important disadvantages. There are lots of efforts to overcome them and Facebook invested $100 million in a program called Atlas to help improve its ads system.
The appearance of online ads rose lots of optimism, for the first time advertisers would know how many people saw their ads, and how many bought something as a result of those ads. However, these days advertisers complain that they don’t know where their money is going. People never see half of the online ads, and the rise of mobile devices makes it hard to track the users because their apps do not accept cookies.
There are two types of ads. Direct response ads are the ones that appear when users do web searches; and display ads, the ones that aren’t necessarily meant to be clicked on, they are more like traditional ads, they make you aware that the product is there. The problem with display ads is that it’s impossible to measure their effectiveness. Advertisers can’t tell if a certain purchase was made because of a certain ad.
Facebook solved this problem! Last week it launched Atlas, a platform that Facebook bought from Microsoft for $100 million last year. Atlas allows sites to read your Facebook ID number even if you aren’t logged into Facebook. They call it the “people-based marketing”. They have stressed that the data are aggregated so that third parties can’t see who bought what.
At Facebook they believe that solving the measuring problem will allow them to grow. With Atlas, Facebook can match up to Google’s AdWords in that it can now show whether ads have worked. Apart from that Facebook can now build up on its key advantage over Google, its login share i.e. the number of users that log in before using the site, which allows companies to relate searches and/or purchases to people.
For the time being Google dominates the ad network on the Internet. One of every three dollars spent on digital ad revenue worldwide goes to Google. Facebook’s share of the world ad-market is under 8%. Despite that there is optimism in Facebook, because its share of the world ad-market doubled in the past two years.
Google’s DoubleClick still has one advantage over Facebook’s Atlas. DoubleClick doesn’t rely on people who use Google search for the ads to work. Atlas on the other hand relies on being fed data from Facebook and is effective only in markets where 80% of the population uses Facebook.
Which of the giants will win the battle remains to be seen. One thing is certain the field of tracking users’ every move is opened and hungry for innovation.
