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How Facebook Improved Its Ad Targeting

Starting the week of September 2, 2012, Facebook rolled out changes to its advertising, improving its collaboration with the businesses that sponsor ads on the site in the hopes of improving the quality of its ad targeting and click-through rate. The idea here is that a business will take an already existing user database and join that database of users, emails, phone numbers, et. al., to the Facebook network. Consider the last time you went clothes shopping, let’s say at the Gap, and the cashier asked you for your email address. That email address is linked with your name. Now what can happen is a hashed database of your information is given to Facebook, Facebook links the customer information you just gave to the Gap to your profile on Facebook, and then the Gap can start displaying ads tailored for you anywhere you are logged in. The algorithm already knows you like to shop there, knows your sex, and may even have an inventory of your previous purchases. Once you condition the probability of clicking on an ad with historical user preference, the probability of the ad being successful is going to rise.

What this illustrates the connecting of previously disjoint networks: We have the Facebook network at the center of it all, and we also have the network of customers that each individual business maintains. Facebook’s new ad targeting system creates directed edges from these businesses networks and connects them to its own network. It creates these one-way local-bridges from a business to Facebook that attaches the customer to the person the customer is when they go home. The motivation is more successful ad targeting, and the rational is that a more connected network, a network that provides more information to the algorithm that targets the ads, will make more intelligent decisions. This is quite similar to the friend suggestion homework problem, but this algorithm actually works by first extending the network (quite dramatically), merging the network’s information, and then taking the relevant information to make more powerful decisions.

Ha, Anthony. “Facebook To Roll Out Email- and Phone Number-Based Ad Targeting Next Week.” TechCrunch. N.p., 30 Aug. 2012. Web. 13 Sept. 2012. <http://techcrunch.com/2012/08/30/facebook-ads-email-phone-numbers/>.

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