Facebook continues its campaign to invade Google's ad-tech turf.
Facebook is building an ad exchange that would automate the sale of other publishers' ads, according to people familiar with the matter. LiveRail, the online video ad-tech firm that Facebook bought last summer, will be the one operating the exchange, which will handle video and display ads.
The exchange will let publishers sell their ads through real-time auctions facilitated by LiveRail. Advertisers will be able to bid on the publishers' inventory through automated ad-buying tools called demand-side platforms (DSPs) that would place their bids on the exchange. It's unclear when the ad exchange will go live.
A Facebook spokesman declined to comment.
By opening up an ad exchange to run ads on others' sites, Facebook would be adding another weapon in its fight to usurp Google as the dominant ad-tech provider. Google's ad-tech arsenal includes an ad exchange, a DSP, an ad server and a mobile ad network, and soon enough so will Facebook's.
Over the past couple years Facebook has been working to match each of the search giant's ad-tech services. Last year Facebook unveiled its own ad server with the rebuilt Atlas as well as a mobile ad network. And the company's ad-tech head David Jakubowski confirmed to Ad Age last year that it was in the process of building a DSP.
For both Google and Facebook, the likely hope is that advertisers would consider consolidating much, if not all, of their digital ad buys with either company. For example, a brand could use Facebook's DSP to buy ads through Facebook's LiveRail exchange that are served and measured by Facebook's Atlas ad server and complemented with ads running on Facebook.
That has been Google's pitch since the company grouped its ad-tech portfolio into the DoubleClick Digital Marketing suite in 2012.
However, the LiveRail exchange is initially expected to be a closer competitior to Twitter's MoPub ad exchange than Google's AdX exchange.
The LiveRail exchange will handle mobile app inventory, the people said, but it's unclear if it will extend to desktop browser ads as well. LiveRail already operates exchanges that handle desktop video ad sales for publishers.
Bloomberg had earlier reported that Facebook was creating a rival to Twitter's MoPub mobile ad exchange. That report seemed to be referencing the LiveRail-powered exchange but did not mention LiveRail.
LiveRail is best known for automating video ad sales for publishers like Conde Nast, MLB.com, CBS Interactive and ABC Family. The company has looked to expand to other ad formats since being acquired by Facebook. During meetings with publishers held shortly after that deal closed last August, LiveRail executives asked if the publishers would be interested in LiveRail handling their display inventory in addition to video, according to people familiar with the matter.
Facebook already sells ads within others' mobile apps through its mobile ad network called Facebook Audience Network (FAN). The LiveRail exchange is not expected to replace FAN anytime soon. Instead, FAN will continue as a way for advertisers to extend their Facebook ad buys to non-Facebook apps.
Initially the LiveRail exchange will use Apple's and Google's mobile advertising identifiers, not Facebook user IDs, to target ads to people across various apps, according to one person with knowledge of the system. Those identifiers are similar to the browser-based trackers called "cookies" that can follow what sites someone visits through their web browser. Cookies don't work within mobile apps, so Apple and Google have created their own ad-specific identifiers to do the job.
