When Facebook announced its IPO, it projected that its vast repository of social data would be the cornerstone of the company’s future success. Today, it looks as though the data shared by Facebook’s massive user base may not be the most valuable thing the platform has to offer its advertisers.

A while back, after the launch of custom audiences, I wrote about Facebook’s quiet focus on behavioral targeting. Now, that shift is not so quiet, and others are taking notice.

Facebook’s move in the direction of behaviorally targeted ads has a significant upside for one group in particular: marketers.

Bringing Behavior to the Newsfeed

targeting behavior

Reaching for the wallet is a good behavior to target.

Facebook Exchange (FBX) ads, once relegated to exclusively to sidebar ad spaces, are now being tested in the Newsfeed. The test is still early and is limited to only a handful of Facebook’s existing exchange partners, but I would be surprised if it performed poorly. I definitely think we can all expect it to eventually be rolled out to the rest of the Exchange partners relatively soon.

Facebook also recently announced that advertisers can now create page post ads without actually posting to their page. This new feature will allow advertisers to create multiple ads and target them to different groups without overloading their Facebook fans with multiple posts. As Ampush’s Mark Luskus pointed out on this blog, the feature will help with testing and more targeted segmentation. For example, you might create two variations on a given post and then run them both as “unpublished ads.” It may also open the door for targeting Newsfeed ads based on Custom Audiences or a similar behavioral profile.

We’re seeing a clear trend in the targeting options available via the Newsfeed, and it’s one I think unlikely to be reversed.

Losing Faith in Social Ads?

A recent Ad Age piece asked if Facebook was losing faith in its original bread and butter: social ads targeted based on demographic and ‘like’ data.

While Facebook clearly isn’t abandoning social ads, its adoption of more tried-and-true online-ad models has the advantage of being more easily explained to CMOs, most of whom never grasped the significance of accruing fans and ‘likes.’ Social levers were interesting, but buying against specific audiences and specific audience behavior is much more interesting for brands and marketers, and much more effective at finding the right people at the right time. – Colin Sutton, social-media director at OMD.

“Social levers were interesting, but buying against specific audiences and specific audience behavior is much more interesting for brands and marketers, and much more effective at finding the right people at the right time,” he said.

The last point is the most important: audience targeting is better at finding the right people and letting marketers reach them at the right time. Many a CMO has found the promise of social ads alluring, but ultimately, most companies have not found them to be effective branding or direct response tools.

Behavioral targeting tools like FBX and Custom Audiences have demonstrated that they perform better, which makes them more attractive to CMOs. This type of targeting is increasing in popularity in spite of the fact that demographic targeting, like Facebook’s social ads, is definitely more familiar and far more easily explained than behavioral tools like Custom Audiences. In this case it’s not about what’s familiar, it’s about what works.

What Does It Mean for You?

Facebook’s expansion of targeted advertising is a calculated move based on expanding the ad products that work best for advertisers and drive the most revenue for Facebook. As the opportunities for behaviorally targeted ads grow, there is more and more opportunity to get the most out of high-performing ad formats.

I, for one, am looking forward to what comes next.

– Caroline Watts

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Caroline Watts
Caroline Watts is a marketing associate at ReTargeter, a full-service display advertiser specializing in retargeting.