Facebook, with over 100 million users checking their account daily, enjoys tremendous reach within its own network–what the company has struggled with is understanding what these same users are doing elsewhere in order to serve up meaningful (read: high eCPM) advertising. Its first effort to pull in data from off-platform activity, Beacon, had to be drastically scaled back in the face of widespread user, and eventually advertiser, protests.

Enter Facebook Connect, a service a seemingly innocuous, but useful, service to Facebook users. Connect allows Facebook users to use their Facebook credentials to log in to other Websites, for commenting and other site features that usually require registration. The Facebook Connect connection ports over users’ real identities, avatars/profile pictures, and, importantly, privacy and sharing settings.

However, as the two-directional arrow in the Facebook Connect should make clear, information is also flowing in the reverse direction, back to Facebook. With this sort of information, Facebook can vastly extend its reach (in terms of gathering user browsing behavior) and paint a much richer picture of users to interested advertisers.

Now, a source has disclosed to Silicon Alley Insider that Facebook has been ruminating over building its own ad network, but not for at least six months. Advertisers who haven’t been scared off by the Beacon fiasco might be receptive, especially provided the granular targeting that Connect data should offer.

Provided Facebook is able to head off a user revolt once targeting via Connect data becomes apparent, should be successful. Not only has it given a wide swathe of publishers reason to drop its pixel on their sites, it has its own highly-trafficked property prepped to monetize with the resulting data.

This entry was posted on Tuesday, April 21st, 2009 at 7:02 pm and is filed under Online Advertising. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.