Facebook Inc. is allowing its biggest competitor to sell its advertising inventory.
On Friday, Google announced a new partnership that will allow it to join the social media giant's real-time bidding exchange, known as FBX. Facebook launched its advertising exchange last summer, but initially excluded Google from participating.
With the new agreement, starting in a few months Google will be able to include Facebook ads in its DoubleClick Bid Manager software, which helps marketers to bid on and purchase digital advertising across the Web (on Google's own DoubleClick ad exchange as well as other digital ad exchanges.)
FBX lets advertisers track people's Web browsing behaviour using cookies, and then to target those people via Facebook ads during the prodigious downtime they spend on the social network. The partnership further strengthens Google's ad buying service, which already controls a large portion of online advertising. Facebook's inventory allows it to tap into a user base of 1.1 billion people.
It also presents a challenge to other so-called demand-side platforms, which help advertisers to bid on digital advertising through exchanges, often in real time. Real-time bidding has transformed the way ads are bought and sold in the digital sphere.
As Advertising Age reported earlier this week, Google's exclusion from Facebook's exchange has allowed smaller demand-side platforms to fill the gap. Companies such as Turn and MediaMath have benefited from Google's absence to serve clients who want to target the largest pool of social media users in the world. Now, they will face competition from the largest advertising company in the world.
The search engine giant this week reported earnings of $2.97-billion (U.S.) on revenue of $14.89-billion in the third quarter. While the cost of digital ads has been in decline, thanks largely to the proliferation of cheaper advertising on mobile devices, Google is boosting its overall ad volume to combat that decline. Its number of paid clicks in the third quarter rose 26 per cent compared with last year.